Home / Knowledge / News / Textiles / NY cotton market continues to move sideways
NY cotton market continues to move sideways
Oct '11
NY futures continued to move sideways this week, with December edging up 51 points to close at 102.73 cents.

Over the last eleven sessions the December contract has traded in a very narrow band of just 534 points, between a low of 98.21 and high of 103.55 cents. On a closing basis the range has even been tighter at just 352 points, between 99.21 and 102.73 cents. The market has now moved sideways for exactly three months and it closed near the midpoint of this longer-term range, having almost no momentum.

What will it take for the market to wake up from its comatose state? Bearish forces are currently kept in check by the Chinese Reserve, who is ready to buy cotton at a price that equates to just slightly below a dollar in terms of NY futures. The Reserve has so far not been able to procure any cotton yet, since the trade has been stepping in front of this proverbial line in the sand by absorbing early arrivals in China as well as imports.

Whether this support price will be strong enough to withstand increasing pressure from Northern Hemisphere crops over the coming months remains to be seen, but we estimate that the Reserve will probably want to rebuild its stocks to at least three months of domestic mill use, which would equate to around 11-12 million bales. Current stocks are estimated to be no more than 1.0 million bales. Although the buying will likely be spread out over a couple of seasons, this additional 'demand' will definitely help to offset pressure from a production surplus this season.

The upside still looks limited as well, because harvest is now gaining momentum and supply is likely going to be plentiful over the coming months. India (6.1 million tons) and Central Asia (1.4 million tons), along with a number of foreign growths (African origins, Australia, Brazil, Greece), are harvesting big crops this season and will substitute for missing Texas high grades.

The US currently has export commitments of 8.0 million statistical bales, of which only about 1.0 million bales have so far been exported. This means that there is still a lot of cotton to come out of the US, sold or unsold. US merchants are currently trying to figure out their quality position, because the US crop presents a very mixed bag of good, bad and ugly cotton against commitments of mostly premium grades. We have already seen a lot of shuffling and substituting in recent weeks and it is still going to take a while before shippers have an accurate picture of their position.

However, we expect the unsold surplus to consist mainly of odd lots with shorter staple and/or high micronaire, some of which may end up on the board, especially if the futures market were to offer prices above the cash market. Unlike last year, when the certified stock consisted primarily of A-index styles, it is shaping up to look more like a B-index contract this season. Just how many of these off-grades will be tenderable still depends to alarge degree on the weather.

Must ReadView All

Courtesy: ITMA 2015

Textiles | On 21st Jun 2018

Italy to host textile machinery fair ITMA in 2023

ITMA, the trendsetting textile and garment technology platform, will...

Courtesy: Connor Group

Textiles | On 21st Jun 2018

Protectionism top threat to textile sourcing: William Connor

Protectionism is the biggest political factor and threat affecting...

NRF urges US Congress to step in, stop trade war

Apparel/Garments | On 21st Jun 2018

NRF urges US Congress to step in, stop trade war

The National Retail Federation (NRF) recently urged the US Congress...

Interviews View All

Krishnanand Tripathi
Textrade International Ltd

We believe in vocational education for entry-level employees, offering...

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Paolo Crespi

For.Tex is an Italy-based leading producer of dyes and thickeners, and is...

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

John Kelley

Textile Events is one of the largest textile fair in the United Kingdom,...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Anisha Chaudhari
Threads & Shirts

Threads & Shirts is a freshly-tailored concept providing men/women a...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Sonam & Paras Modi

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

June 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Advanced Search