“With these strong continuing auction sales, and other market data, indicating more mill use than previously thought, USDA has revised China’s consumption forecast up substantially,” by 1.5m bales to 35.0m bales.
India, the largest cotton producer, has imported bales to restock after heavy exports last year. Indian farmers have also suffered through damaging pests and late monsoon rains.
Moreover, U.S. production may have also fueled the momentum.
Related: Are China ETFs Ready to Rally?
“Ongoing weather concerns in US cotton regions also added to the market’s momentum,” Madeleine Donlan at Commonwealth Bank of Australia told Agrimoney.
iPath Bloomberg Cotton Subindex Total Return ETN