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 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Karel Williams
Dow Microbial Control

'Silvadur is most rapidly adopted in areas where hygiene-conscious and...

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Ashok Desai
Bombay Textile Research Association

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

Eamonn Tighe
Nature Works LLC

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

Suresh Patel
Sidwin Fabric

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

Pranav Mishra
Huemn

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

Rupa Sood and Sharan Apparao
Nayaab

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

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