As cotton product remains thin in Asia, the worries of many farms are expected to be short-lived with strong crops on the way in the U.S. and India.
"Prices could drop to the 70's, we're expecting a solid U.S. crop," Sterling Smith, a market analyst with Country Hedging brokerage told RTTNews on Thursday. "India is expecting a strong to record crop. China has a disappointing crop this year."
Demand was the primary driver for the highly-sensitive cotton market. Overall there is a global weakness in demand, according to Smith.
"I have demand concerns domestically," Smith told RTTNews. "Cotton is extremely sensitive to the market. If gas prices go down, cotton goes down. Lack of demand will hold the market back."
Although prices were reportedly rallying on the thin supply in Asia, they maintained a level of $0.85-0.93 cents in the U.S. market. However, prices could reach $1.10 if supply was not anticipated to come online and product remained thin. But strong crops are expected from India and the U.S., which would cause demand to remain steady.
Supply was said to be thin on the back of low Indian stocks, which presented an upstream issue for cotton.