The old crop U.S. and world cotton supply/demand outlook remains framed by the January 12 USDA World Agricultural Supply/Demand Estimates (WASDE) report which forecasted U.S. average yield and production of, respectively, 819 lbs/acre and 21.72 million bales.
While the supply side of the picture is now more or less settled, U.S. exports is the main variable determining old crop futures prices (i.e., the Mar07, May07, and Jul07 contracts).
This implies a supply/demand rationale for '07 old crop futures contracts to trade in a similar to slightly lower trading range to their 2006 counterparts. However, these price depressing fundamentals could be supported by strength in Dec07 futures. Also, old crop futures could still rise (and fall) based on purely technical factors, as has been the case over the last two months.