By John Robinson, Roger Sahs
Southwest Farm Press
The outlook for U.S. cotton prices appears not as high as for the 2021 crop, but still decent. And perhaps volatile. The market has been signaling the possibility of somewhat lower prices for many months. For example, the old crop ICE Mar’22 contract has, like the expired Dec’21 contract did, traded higher than the deferred contracts since the summer of 2020 (Figure 1). This “inversion” is not the normal pattern. It implies a near-term shortage of cotton, either from excess demand and/or inadequate supply. In 2021, it also appeared to be influenced by a large amount of speculative buying.