Home / Knowledge / News / Textiles / NY Futures display mixed performance this week
NY Futures display mixed performance this week
04
Feb '12
Plexus Cotton Limited reports that NY futures had a mixed performance last week, as March dropped 138 points to close at 94.21 cents, while new crop December advanced 81 points to close at 95.06 cents.

While the general direction of the market has remained sideways, we saw a further widening of the spreads towards full carry this week. Even new crop December is now trading at a premium to the spot month! The vanishing of the market's inversion, which has been a feature for most of the last 18 months, is generally seen as a sign of weakness since it signals that the tight supply situation is finally easing.

Pointing in that direction as well are the recent increase in certified stock (totaling almost 86'000 including bales under review) and the large-scale cancellations that showed up in today's export sales report. Even though there were 125'900 running bales in new Upland sales last week, they were more than offset by cancellations of 290'000 bales, with China being responsible for the majority of these reductions.

The US export sales report was not all negative though, because shipments jumped to a marketing year high of 386'700 running bales. For the season, total sales now amount to 10.8 million statistical bales, of which 4.0 million bales have already been shipped.

Although these US cancellations may point to continued weakness in demand, this is not the impression we are getting in some of the Asian markets these days. After months of digesting high priced inventory, many mills are finally seeing the light at the end of the tunnel, as yarn prices have been trending slightly higher in recent weeks and some mills have even been increasing their monthly cotton consumption again.

There has also been a big jump in polyester prices, which have risen by about 15% over the last three weeks in Taiwan and China. The apparent reason for this sharp advance is a short supply of PTA, the raw material of polyester. With polyester prices now quoted at USD 1.77/kg (80 cents/lb), the huge price gap that existed in relation to cotton last year has narrowed considerably.

Of note this week was also the large jump in open interest on Tuesday and Wednesday, when nearly 10'000 new longs and shorts were added. Open interest now stands at around 178'000 contracts, which is over 40'000 contracts more than two months ago. While the trade has been selling into market strength since the middle of December, index funds and speculators have been adding new longs.

We can definitely discern a different attitude among hedge funds when it comes to riskier assets like commodities. The massive monetization by Central Banks is starting to show results, as economic indicators are improving and this in turn is reversing some of the "safety trade" we have seen in the second half of 2011.

Money managers, no longer content with earning just 1.8 percent on a 10-year US treasury, are moving some of their holdings back into stocks, emerging markets and commodities in the hope of finding better returns, allowing them to keep up with the rate of inflation. Since some of the money is moving overseas, it has started to put pressure on the US dollar, which is supporting commodity prices.

Must ReadView All

Textiles | On 24th Jan 2017

Textile industry demands relaxation of laws from Budget

The upcoming Union Budget 2017-18 should focus on relaxing certain...

President Donald Trump; Courtesy: White House

Textiles | On 24th Jan 2017

US sets ball rolling for withdrawal from TPP

President Donald Trump has set the ball rolling for withdrawal of the ...

Textiles | On 24th Jan 2017

Indian cotton consumption estimated at 290 lakh bales: CAI

The domestic consumption of cotton during the crop season 2016-17...

Interviews View All

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

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

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search