Pat McClatchy, executive director of the Ag Market Network, said the challenge for cotton producers today is not necessarily to figure out market forces, but to capitalize on opportunities they create.

 “We’ve gone through an evolution in cotton. The cotton market has become a multi-dimensional, rather complicated puzzle for analysts who are trying to decide what is going on. Things we did not look at in the past, we have to look at today.”

McClatchy said these factors include the value of the dollar, overseas financial conditions, crude oil, grains and funds. These factors can have both macroeconomic as well as short-term impacts on the cotton market. “The funds can push a market further than any of us would have thought they could.”

Cotton producers have plenty of opportunities “to get higher prices than they would normally get,” McClatchy said. “We seem to swing to extremes. There are opportunities for super low prices in cotton, and actions to be taken.”

Stevens agreed. “How far will a market go? Too far. It always has and always will, and that’s where the marketing opportunities come into play. Most market moves begin technically, and when they’re about halfway through a move, the fundamentals will confirm or reject that move. Keep an eye on the fundamentals. When the market technically gives you an opportunity, that’s money in your pocket.”

Anderson sees March futures as stronger than December futures. “March has a good likelihood of staying in the 88 cent to 98 cent range, but could make it over a dollar for a short period of time.

“For December, I was very impressed with the strength that the mid-80s showed. I’m friendly to a December 2012 trading range of 85 cents to 95 cents. But given the extremes of the market, I would leave the door open for a December range of 75 cents to 95 cents, which indicates that December is not likely to try the dollar level, given what we know now about the fundamentals and non-fundamental forces. When cotton gets in the 95 cent area or higher, it’s time to get serious about fixing some of your crop prices.”