Home / Knowledge / News / Textiles / New York cotton futures settle lower
New York cotton futures settle lower
03
Mar '12
Plexus Cotton reported that New York (NY) futures went nowhere this week, as May edged up just 45 points to close at 89.67 cents, while December advanced 88 points to close at 90.88 cents.

The market continued its choppy sideways trend this week, as it remained caught between a set of bullish and bearish crosscurrents. The most bearish argument is of course the global production surplus, which is likely to extend for a third consecutive season and which may boost global ending stocks to their highest level ever at the end of next season.

However, there is still a long way to go before this scenario becomes a reality. Against that we have a present situation that looks a lot more supportive, since China has been absorbing more than the global seasonal surplus into its strategic reserve, thereby creating a tight situation in the two key export markets - the US and India.

After adding another 276'400 running bales over the last two weeks, the US has now committed around 11.3 million statistical bales for export, of which around 5.3 million bales have so far been shipped. If we add domestic mill use of 3.5 million bales, the US has already committed 94% of its 15.7 million bales crop this season. Since its beginning stocks were relatively small at 2.6 million bales, the US really doesn't have a lot of cotton left for sale at this point.

The same is the case in India, where actual export shipments have apparently reached 8.4 million local bales, with export registrations rumored to be as high as 12 million local bales. Exports of 8.4 million bales and domestic use of 26.0 million bales would add up to the estimated crop size of around 34.5 million bales, meaning that any additional exports would have to come from beginning stocks.

With the US and India fairly well committed, spinners will have to cover their needs in the second and third quarter mainly from Brazil, Argentina, Australia, Uzbekistan, Turkmenistan and various African origins. While there won't be any shortage of cotton, some of these origins are either expensive (Australia) or are playing hard to get (Uzbekistan). The Central Asian countries still sit on an estimated 6.5 million bales for sale and their intention is therefore a key factor for global prices over the next few months.

The most positive news for commodity prices this week came from the European Central Bank, which injected another massive amount of liquidity into the European banking system on Wednesday. In its second “Long Term Refinancing Operation” (LTRO) in eleven weeks, the ECB handed out another US$ 708 billion in very cheap 3-year loans to some 800 banks all over Europe, bringing the total of these 1 percent interest loans to over US$ 1.3 trillion since December. While some of this money is refinancing existing loans at a cheaper rate, around US$ 690 billion represent new liquidity.

To put the sheer size of these two LTRO operations into perspective, the ECB has effectively increased the money supply of the Eurozone by 10% since December, by printing an extra 3'900 US dollar on behalf of every one of its citizens. Europe has now more or less matched the money printing efforts of the Federal Reserve. While the Fed has made US$ 1.85 trillion available via its two quantitative easing programs, the ECB and the Bank of England have so far created US$ 1.3 trillion and US$ 0.5 trillion, respectively.

Must ReadView All

Textiles | On 6th Dec 2016

Garments, yarn export entitlement quota extended for 1 yr

Indian government has extended the export entitlement quota for...

Textiles | On 6th Dec 2016

Cash inflow will revive sales: Textile industry

The textile industry representatives are hopeful of revival of...

Courtesy: SIMA

Textiles | On 6th Dec 2016

Amma gave special attention for textile growth in TN: SIMA

Former Tamil Nadu chief minister J Jayalalithaa paid special...

Interviews View All

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Mark Paterson
Technical Absorbents Ltd

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

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Karan Arora
Karan Arora

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

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
December 2016

December 2016

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search