Home / Knowledge / News / Textiles / NY cotton futures end with gains this week
NY cotton futures end with gains this week
23
Jun '12
Plexus Cotton Limited reported that New York (NY) futures rebounded this week, with July gaining 234 points to close at 73.89 cents, while December rallied 193 points to close at 72.28 cents.

After July had fallen to a new low of 66.10 cents on Monday, the selling finally started to subside and buyers came out of their hiding. Last week we talked about the drivers behind the recent collapse in the cotton market, which saw prices drop by over 26 cents between April 23 and June 4.

When the spot month traded in the mid-60s earlier this week, most of these negative influences began to fade away, allowing the short-term momentum to reverse to the upside.

It seemed as if the various market participants all underwent a sentiment change at around the same time, which allowed the market to rise in a vacuum of limited selling.

Growers were no longer keen in hedging or selling their crops once prices traded in the mid-60s, which in many cases represents a level that is at or below growing cost. US growers in particular are turned off by these low prices and they may instead put their cotton in the government loan at 52 cents and wait it out.

If the US crop were to get locked away for some time, it would remove pressure from the market. After the rest-of-the-world produced a surplus of 4.4 million bales in the current season, the USDA now predicts a production shortfall of 6.8 million bales outside the US in 2012/13.

Therefore, if US cotton plays ‘hard to get’ in the loan, then this enormous crop pressure that everyone is expecting is less likely to materialize, at least not at depressed price levels.

While merchants and locals were still engaging in some damage control late last week as well as Monday by doing more panic-driven bearish options strategies, this too appeared to eventually run its course. Judging by the latest CFTC report, which showed a small drop in trade longs after two weeks of steep increases, the need to play defense seemed to be a lot less pressing.

Short speculators and chart traders, who base their decisions mainly on technical indicators, had a very successful run in this bearish move and were quick to take their profits once they had confirmation of a short-term trend reversal. This removed yet another source of selling.

Last but not least there was the anticipated shift on the macro side, as money managers once again flipped the switch to “risk on” after they became more confident that a new round of stimulus might be just around the corner. While the Fed has so far resorted to lip service only, China’s rate cut by 25 basis points was enough to embolden some hedge funds to return to riskier assets.

Cotton was clearly benefitting from a wave of buying in outside markets, as stocks and commodities rebounded sharply this week. Food crops were particularly strong, with November soybeans closing at 13.39 dollars/bushel, up 70 cents since last Thursday, after the USDA reported continued strong export sales to China.

Must ReadView All

Courtesy: Aptos

Information Technology | On 25th Feb 2017

Tailored Brands selects Aptos sales audit solution

Aptos, Inc., a market leader in retail technology solutions, has...

Information Technology | On 25th Feb 2017

One Jeanswear Group deploys Centric PLM suite

Centric Software, the leading PLM solution for fashion, retail,...

Courtesy: Applied DNA Sciences

Apparel/Garments | On 24th Feb 2017

SigNatureT DNA can help prevent apparel counterfeiting

SigNatureT DNA is forensic molecular tag by Applied DNA Sciences...

Interviews View All

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Yash Maniyar
Rekha Maniyar

Indian fashion market is growing at a staggering rate

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Larry L Kinn
Suominen Corporation

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

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

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
February 2017

February 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