Cotton POP payment First Week of December - A little bit like Cyber Monday.
12-1-2025
So POPing cotton this week is a short term decision. It's sort of like if you know something that you want to buy in the next week or so, you will probably get the best price Today. But if you might want to get something in the next few months, then it might be better to let this short term deal go by and see what things are looking like in January or February.
The POP Payment for this week through Thursday is 1.23 cents which represents the highest it has been so far. It is tracking lower primarily because of a spike in the market over last week PLUS we have moved to March which also represents a jump over where December left off.
We can watch the prediction which is a daily posting for a 5-day price average. The 5th day is posted Thursday at noon giving us knowledge to what it will change to on Friday for next week. You can lock in this weeks pop payment, or just leave the safty net in place and take no action.
Should you POP this week or Not?
- If the market drops in the future, then the POP payment offers the most effective way of offering short term downside protection at these prices. If you are planning on waiting to price, then it offers a cheap hedge to leave it in place and not POP your cotton yet.
- If you are selling now or soon, and still have beneficial interest (onership) of your bales, you will more likely benefit from preserving this short term highest POP payment by popping by Thursday IF THIS MARKET TREND OF GOING UP A LITTLE EVERY DAY CONTINUES. At this point, I'd just watch it a couple more days and make the decision mid-week.
- If you are putting your cotton in the loan, then you cannot POP.
Bottom line, is that being able to watch the weekly changes and know if it is going up or down on Friday by Thursday is a short term benefit. For medium and long term strategies, it becomes more of a risk management tool than just a way to catch an extra half cent of so.
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