Home / Knowledge / News / Textiles / NY cotton futures continue to move higher this week
NY cotton futures continue to move higher this week
11
May '13
Ongoing planting delays continued to keep potential sellers at bay this week, which allowed the market to trend higher. West Texas is still too dry, while parts of the Mid-South and Southeast have experienced wet and unseasonably cool conditions.

Old Man Winter is apparently still not quite ready to quit, as another cold front is dipping down from Canada this weekend, bringing more rain to the Memphis territory, with low temperatures dropping into the high 40s. Fortunately the weather is finally expected to improve once this next front has passed.

While there is still time to get the seeds in the ground without losing yield potential, the US crop will be quite a bit later than normal and therefore becomes susceptible to adverse weather conditions in the fall. This means that traders and mills will rely more than usual on current crop supplies for their late summer shipments. The problem is that there is not really that much cotton available anymore in the US, after strong export sales have reduced inventories considerably in recent months.

Here is the math! We started with supplies of 20.65 million statistical bales, of which 13.1 million have so far been sold for export and 3.4 million go to domestic mills. This leaves theoretically 4.15 million bales for sale, but at least 1.0 million have to be reserved for domestic mill use from August to October/early November and a similar amount is needed for exports from August onwards.

Export commitment currently amount to around 1.6 million statistical bales for 2013/14 and we estimate that at least two-thirds of these bales are for shipment August/October. Therefore, after backing out these reserves, we are left with just around 2.2 million bales still available for sale, of which 0.5 million are in the certified stock!

Considering the low amount of unsold stocks in the US, and in most origins outside China for that matter, it is surprising that open interest in July futures keeps getting bigger. After all there are just a little more than six weeks left before July enters its notice period and there were still 118’886 contacts open as of this morning, 7’459 more than a week ago.

Maybe the shorts are hoping for the inversion to fade away or for the selling basis on their unsold physical positions to improve, but by waiting and increasing the position they are playing a dangerous game.

Tomorrow’s USDA supply/demand report, in which the government provides its first detailed look at the 2013/14-season, will give traders something to chew on and determine the market’s next move. Analysts seem to agree that world production will likely exceed mill use for a fourth season in a row. Although world production is expected to decline to around 114-115 million bales, mainly due to reductions in China and the US, it is probably not enough to drop to the level of consumption, which should improve slightly to around 109-110 million bales.

Must ReadView All

Textiles | On 28th Feb 2017

China's textile & apparel exports up 10.2% in Jan 2017

Exports of textiles and garments from China resumed growth in the...

Apparel/Garments | On 28th Feb 2017

Delta Galil's Q4 operating profit jumps 80%

In the three months to December 31, 2016, operating profit at apparel ...

View of YiwuTex 2016; Courtesy: YiwuTex

Textiles | On 28th Feb 2017

Smart knitting system to grace 18th YiwuTex 2017

The thematic functional knitting machinery zone at the 18th YiwuTex...

Interviews View All

Poojaa Kumar Deepak
Zeven

Zeven's performance sports apparel is designed for the Indian body type,...

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Ashok Desai
Bombay Textile Research Association

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

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Pranav Mishra
Huemn

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

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
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