The most-actively traded March contract has been stable at values between 58 and 60 cents.
With the fall in prices since the spring, there has been little incentive for mills to enter the market.
As long as a down trend persists, the longer buyers wait, the lower the prices they may have to pay.
For that reason, recent stability may eventually stimulate additional buying.
There have been reports of sporadic mill demand, and U.S. export sales have shifted higher in the past two weeks of data.
According to USDA export figures, the U.S. began the current crop year with a relatively high level of sales carried over from the previous season.
As a result, the total commitment for shipments in 2014/15 has been able to hold to levels near those from last year even though sales have generally been weak since August.
The recent acceleration in sales suggests some potential for U.S. export sales to move higher from the current figure of 10 million bales.
However, government actions in both China and Turkey may limit the ability for stronger sales volumes to be maintained in coming months.
China has been the largest customer of U.S. growers for the past decade, and China is restricting the amount of quota it will issue.
Turkey has consistently been a strong buyer and has recently surpassed Mexico as the second largest destination. Despite protests from the Turkish textile industry, the Turkish government is conducting an investigation into potential dumping by merchants handling U.S. cotton.
For these reasons, it is also possible that the eventual volume of cotton exported from the U.S. could end up being below the 10 million bales currently forecasted.
If realized, ten million bales of exports would be the lowest amount of exports since 2000/01 and, along with increased acres and rainfall in Texas, is a reason for the large increase projected increase in ending stocks.
Drought conditions have completely receded from much of West Texas.
According to the Drought Monitor, most of the region either is the lowest category of dryness or not suffering from any lack of moisture.
The cool and wet conditions experienced throughout much of the southern United States for the past several months are characteristic of an El Nino conditions.
El Nino conditions may lead to further easing of the drought in Texas, with NOAA’s seasonal outlook calling for further alleviation in coming months.