Home / Knowledge / News / Textiles / NY cotton futures fall this week
NY cotton futures fall this week
May '13
A slew of bearish technical and fundamental factors put the market under pressure this week.

First we had the breach of a 6-1/2-month uptrend line, which put the spec longs on the defensive, although we have yet to see any widespread spec liquidation, judging by the relatively small change in July open interest over the last two sessions.

Then there was the forecast for rain in West Texas, with most areas around Lubbock expected to receive some moisture over the next couple of days. Further adding to the bearish sentiment this week were reports about slower growth in China as well as some analysts predicting an end to the ‘commodity super-cycle’.

However, while the mood has undoubtedly shifted from cautiously optimistic to bearish, especially with the chart turning over, the overall situation hasn’t really changed much in this bifurcated market.

The global balance sheet has been bearish for quite some time and strong Chinese imports are the only reason why prices aren’t a lot lower. As we have stated before, China has imported nearly 2 million bales a month for the last 21 months and is showing no signs of slowing down. If anything, this drop in prices may actually spark additional buying by China and we have already noticed an increase in activity this week.

A lot of the action this week was in the July/Dec spread, which collapsed from a 70 points inversion to 186 points carry. The large certified stock of 510’000 bales, the relatively high price level of July futures in relation to the cash market and a weakening technical trend have prompted bull spreaders to throw in the towel for now.

However, as soon as July converges with the cash market, it should find strong support, irrespective of its spread to December. This is particularly true this season, since we estimate that there are only about 2 million bales of US cotton left for sale, including the certified stock. Landed Far East prices have not nearly sold off as much as the futures market and we therefore feel that the certified stock should start to attract buyers if July trades at around 79 to 80 cents.

US exports sales for the week ending May 16, when July was trading around 86-87 cents, amounted to 138’100 running bales of Upland and 5’400 bales of Pima for both marketing years. China continued to be the main buyer with 29’800 bales of Upland and 3’200 bales of Pima, followed by 16 other markets.

Shipments were slower than the week before at 254’100 running bales, but still amounted to about 10% of unshipped commitments of currently 2.4 million statistical bales. Total commitments for the current marketing year are now at 13.3 million statistical bales, of which 10.9 million have so far been exported. Sales for the coming season (shipment August onwards) are currently at 1.7 million statistical bales.

The prospect of rain in West Texas has certainly played a part in the market’s weakness this week. Conditions are favorable for storm activity over the next two or three days and possibly into next week, with many stations expected to finally receive some much needed rain.

Must ReadView All

Courtesy: BGMEA

Apparel/Garments | On 27th Feb 2017

'Brands & buyers should help Bangladeshi factory owners'

Brands and buyers should come forward to help factory owners in...

Apparel/Garments | On 27th Feb 2017

Myanmar sets up new committee to revise minimum wage

The Government of Myanmar has set up a new committee, replacing an...

Courtesy: PT Indonesia Taroko Textile

Textiles | On 27th Feb 2017

Taiwan's Lealea to buy Tarako textile plant in Indonesia

Taiwan based textile manufacturer Lealea Enterprise Company, one of...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Binoy Ravjani
Hero's Fashion

‘One of the recent trends in hand block printing is the indigo process,...

Larry L Kinn
Suominen Corporation

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

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Mark Paterson
Technical Absorbents Ltd

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

Karan Arora
Karan Arora

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

Ritu Kumar
Label Ritu Kumar

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

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

February 2017

February 2017

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


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search