Response of U.S. Cotton Export Sales to ICE Cotton Futures Price (Scroll Down for More Discussion)
The red line shows daily settlement of nearby ICE cotton futures, in cents per pound. The blue plateaus reflect weekly net export sales for the 2021/22 marketing year, in thousands of running bales. The graph generally shows the expected demand response to fluctuating futures prices for the 2021 crop. Generally, as U.S. prices fluctuate higher, export sales (“quantity demanded”) fluctuate lower. As U.S. cotton becomes cheaper, more of it is typically sold, although sometimes mills will wait during downtrends to fix prices as expected lower levels. As cotton becomes more expensive, mills may buy some to cover their needs, and then sit on their hands again for a reversal (or switch to competing suppliers).
Having said all that, 21/22 export net sales look pretty good to me given the uptrend and high level of the current price range.