Home / Knowledge / News / Textiles / NY cotton futures continue to slip this week
NY cotton futures continue to slip this week
20
Apr '13
NY futures continued to slip this week, as July gave up 126 points to close at 85.48 cents, while December dropped 58 points to close at 85.08 cents.

The futures market remained under pressure as hedge funds continued to exit commodity positions. According to the latest CFTC report, speculators were 7.3 million bales net long as of April 9, down by 2.5 million bales in three weeks, and over the last ten days this position has probably been reduced further. This exodus by the spec sector has given the trade an opportunity to reduce its net short position, although it was still rather large last week at 14.4 million bales.

While the futures market was going up, it proved difficult for merchants to sell their basis-long positions (long physicals/short futures), because the futures market was constantly running ahead of the cash market. Now, with the market trending lower, the basis is strengthening again, which should allow shippers to finally dispose of their basis-longs in current crop.

There is a sense of urgency to do so, since the futures market is still not offering any carry to hold on to cash positions beyond July and the outlook for new crop isn’t really bullish at this point. Trade activity should therefore pick up, as mills still need to buy plenty of cotton for the second and third quarter, while merchants are keen to clean out their current crop inventory. This should lend some support to the futures market, since the sale of basis-long positions involves the buying back of futures.

Today’s export sales report was once again surprisingly strong, as 226’200 running bales of Upland and Pima were sold for the current marketing year, plus an additional 36’000 running bales for shipment August onwards. For the second week in a row China was the main taker with 125’100 running bales net, followed by fifteen other buyers. Shipments were excellent as well at 423’000 running bales, with 227’200 bales going to China. For the current season total commitments now amount to 12.4 million statistical bales, of which 9.2 million bales have already been exported.

However, this constructive export sales report wasn’t enough to reverse the market’s bearish mood, which was further exacerbated by stories about the impending release of Indian and Chinese government stocks. The Cotton Corporation of India is said to tender 250’000 bales to the domestic industry on April 26, with further quantities to follow in the months ahead, which will likely reduce the need for imports.


Must ReadView All

Textiles | On 24th Jun 2017

Applied DNA to tag cotton for 2017/18 US ginning season

Applied DNA, provider of DNA-based supply chain security,...

Apparel/Garments | On 24th Jun 2017

NPD Group launches Trend Tracker for apparel trends

Global information company the NPD Group has launched Trend Tracker,...

Textiles | On 24th Jun 2017

Cotton USA’s first innovation competition in UK ends

Cotton USA has announced the successful close to its first innovation ...

Interviews View All

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Smita Murarka
Amanté

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

Marcel Alberts
Eurofibers

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

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Wendell Rodricks
Wendell Rodricks

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

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Ritu Kumar
Label Ritu Kumar

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

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

news category


Related Categories:
June 2017

June 2017

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

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search