“I cannot trust a man to control others who cannot control himself.” Robert E Lee
Most of the cotton in China’s state reserves is in private hands, and there is a line of thinking that mills are now running on much cheaper cotton and this will cause a bump in consumption. China has been using between 34.3 Mb to a high of 41.0 Mb, for 9 years, and this year’s rate of 38.5 Mb falls in the middle. The great surge from the late 90s to 2007/10 saw use jump from around 20 Mb to 50 Mb, sparking the gov decision to hoard and stockpile cotton from 2010 to 2015. World use has been nearly as erratic as has China’s, rising from a decade in the 90s at 85 Mb to 122 Mb in 07/08. A drop to 106 Mb, then back up to 119, then down to 105, then back up to 113 all came in 7 years. The only conclusion for this series is that there is no pattern or trend, and 122 Mb seems to be a strong weight.
From Dave Toth, tech analyst at RJO. From an historic perspective, the monthly chart shows the market back in the middle of its 7.5 year lateral range where the odds of aimless whipsaw risk are advised. Bullish sentiment has returned to relatively frothy levels that could reinforce a peak/correction/reversal count, but history shows that this indicator has sustained levels much higher than the current 75% level in past bull runs.