Cotton is the soft fiber that grows around the seeds of the cotton plant. Cotton is most often spun into thread and used to make a soft, breathable textile, which is the most widely used natural-fiber cloth in clothing today. Africa and South America are large providers of cotton.
Cotton Trading Prices/Rates
The contract for cotton is fixed and standardized, allowing cotton traders to focus on pricing.
The Contract Size for cotton is 50,000 pounds net weight. The Minimum Price Movement within a cotton contract is 5/100 of a cent, or $5 per contract.
Cotton futures have been trading in the U.S. since 1870 at New York’s original futures exchange. The NYBOT cotton options market, opening in 1984, represents one of the most active agricultural options markets in the world.
Although in the past, there were many state cotton exchanges. The NYCE and the Memphis Cotton Exchange are still in operation today.
Cotton Trading Software
Ask any cotton trader, producer or general investor what trading tools or types of financial analysis he is using to track cotton prices and you're probably going to hear a list of different technologies and methods. However, having the right tool for the job is important. Trading software can be used to boost an existing approach by supplying an inter-market perspective. The key to a cotton trading system is its ability to forecast moving averages. One of the better cotton trading software products is VantagePoint trading software. This software can help “see” what is likely to happen in the cotton market before other traders (using only single-market analysis) catch wind of it.
Cotton Trading Major Indicators and indices
Successful cultivation of cotton requires a long growing season, and production of the crop for a given year usually starts soon after harvesting the preceding autumn. Cotton trading contracts are for March, May, July, October, December (Current month plus one or more of the next 23 succeeding months). The last cotton trading day is seventeen business days from end of spot month.
Cotton Market News
The National Cotton Council of America provides information on, and promotes cotton trade in the U.S. The USDA gives information on cotton production, pricing and import/export data. The International Cotton Association promotes global information on the cotton trade and gives some trend insight for cotton traders.
The cotton market is truly an international one. The National Australian Cotton Trade Show brings Australia’s cotton producers together. Many other countries feature their own versions of major cotton trade shows as well.
Cotton Trading History
Cotton has served as one of the first “currencies” of world trade. Some authorities claim that it was likely that the Egyptians had cotton as early as 12,000 BC. Cotton continues to be important today in all countries as a manufacturing staple and trading element.