COTTON PRICES AND MARKETS 
00 
ble to stop a bull movement in the short swing are the increased vol- 
ume of spots offered for hedging and the decline in purchases by 
mills. The bear raid is checked by the increasing volume of spinners' 
purchases, and the lessening volume of merchants' sales. There are, 
of course, exceptions to the principles laid down. The spinner often 
buys at the top of the market, and the merchant hedges at the bottom. 
The spinner is governed largely by the yarn and cloth buyers and the 
cotton merchant is governed partly by the sales of farmers until 
he gets the cotton in his possession. Some merchants advocate selling 
on a rising market, whereas many spinners make it a rule to buy on 
a declining market or on the first stages of a rising market. 
Figure 9 shows the short-term price movements in the New York 
market from January 30 to October 2, 1923. 
Short-time price movements in the new York market 
January 30 - October 2, 1923 
CENTS 
PER 
POUND 
30 
28 
26 
2^ 
22 
20 
I Dot/ -to- day price of Middling Spot Cotton 
I 
June 
Fig. 9. — The comparison here made is between a 49-day moving average of the middling 
spot price for each dav in New York and the actual spot price for each day from 
January 30, 1923. to October 2. 1923, inclusive. In the computation of the 49-day 
moving average Sundays and holidays have, of course, been omitted. The swing of 
the actual price around the average represents in a measure the short-term movements 
TRANSITION FROM OLD TO NEW CROP 
Interest in a new crop of cotton begins when sufficient facts are 
available to lay the basis for forecasting farmers' intentions to plant. 
Thus, while contracts for delivery in October, which is the first ac- 
tive month in the new crop year, may be bought on the exchange be- 
ginning on the first day of the preceding November, according to 
rules of the exchanges, little interest is developed in such contracts 
imtil after the beginning of the calendar year. These early transac- 
tions are almost entirely speculative, though a spinner may occa- 
sionally have need of such a market. They are based essentially on 
the price of the present crop, though long-distance forecasts of de- 
mand based on anticipated general business conditions, and probable 
supply based largely on farmers" intentions to plant as determined by 
prevailing prices, undoubtedly have some influence. 
