Too, with India now surpassing the U.S. as the world's second largest producer behind China, the Chinese mills have found Indian cotton to be a very favorable product at a price below U.S. growths. To the credit of the Chinese mill cotton buyers, they are now beginning to realize that cotton prices are headed higher and that time is running out to buy cotton at cheap prices.
With the increase in New York futures, textile mills have raised their offering price for cotton. With offering prices now mostly between 63 and 64 cents, mills will be able to conclude some price fixations, but they also may be caught chasing the market higher.
Export sales of U.S. cotton for the week ending October 11 were a net of 168,800 RB, with Upland sales at 158,500 RB and Pima at 10,300 RB. Turkey was the primary buyer of upland with 58,100 RB followed by China and Indonesia. Switzerland was the primary buyer of Pima with 7,000 RB followed by Pakistan and Egypt. Export shipments were 251,900 RB with Upland accounting for 246,600 RB and Pima at 5,300 RB.
China was the primary destination for Upland shipments at 104,300 RB followed by Turkey and Mexico. China was also the primary destination for Pima shipments at 2,200 RB followed by Pakistan. Turkey will continue to be a major buyer of U.S. cotton and will remain as the primary export market for U.S. cotton into calendar year 2008.
While the market for 2007 is improving, the primary factor is the tightness in carryover that will result form the decline in 2008 plantings. Thus, December 2007 is not in danger of racing higher. However, it is without question trending higher and will continue to see more upward pressure than downward pressure.
Yet, with U.S. styles being higher priced that other growths, certificated stocks continue to build and now stand at more than 600,000 bales with another 32,614 bales awaiting review. Look for certificated stock to approach 700,000 bales. Cotton prices will continue to be supported by surging soybean and wheat prices. Too, the further decline in the value of the U.S. dollar encourages more and more cotton exports. Grower equities are in the 500 point range and will move higher.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
