Home / Knowledge / News / Textiles / NY cotton March futures sink 132 points
NY cotton March futures sink 132 points
31
Aug '13
Speculators have clearly lost their appetite for the cotton market after last week’s drubbing and continued to reduce their net long position.

This is evident from the reduction in December open interest, which has dropped by more than 35’000 contracts over the last seven sessions. Since the trade was active buying back some of its net short, probably as a result of new sales and mill fixations, trading action was fairly balanced this week, which allowed for an orderly liquidation. 

Speaking of sales, today’s US export sales report was seen as disappointing, as net new sales of Upland and Pima amounted to just 79’000 running bales for the current marketing year, plus 2’200 bales for the following season.

However, before getting too negative on sales we would like to point out that last week straddled high and low prices, with mills having only two days to take advantage of cheaper offers. Furthermore there were 51’300 in cancellations, which could be the result of shippers freeing up some US cotton by switching to other growths when December traded in the low 90s.

The fact that there were 17 markets participating in the buying and that over 200’000 running bales were shipped to 21 destinations tells us that there is still a lot of interest in US cotton. Maybe we should look at supply as the limiting factor at this point, since there is hardly any old crop cotton left and shippers are reluctant to commit high grades, considering that the crop is late and that it may have some quality issues due to the irregular growing season.

While news on the cotton front was relatively uneventful this week, there has been a lot going on in outside markets. First there is the escalating conflict in Syria, which has sent crude oil prices to their highest level in over two years. Then there is the ongoing exodus from emerging markets, which has led to sharply lower currencies in markets relevant to cotton, such as India, Turkey, Brazil, Thailand or Indonesia, just to name a few.

Over the last five years we have seen an investment landscape that has become increasingly distorted by an abundance of cheap money, as trillions of dollars are chasing after assets in ‘pump and dump’ fashion, with little regard for fundamentals or risk. Hedge funds, sovereign wealth funds and speculators have been inundating emerging markets with their hot money, driving up currencies and asset prices in a self-reinforcing cycle.

As global yields collapsed in the process, borrowing costs reached record low levels last year in places like Brazil (2.5%), Turkey (3.2%) or Indonesia (2.85%). Sooner or later this tide was destined to reverse and we are now seeing massive capital flight, which is putting pressure on currencies and assets alike in these emerging markets.

Governments and central banks are trying to stem the outflow by raising lending rates, but that may not be the best remedy considering that energy prices are rising as well, since this could lead to a squeeze and choke off economic growth even further.


Must ReadView All

Textiles minister Smriti Irani lighting the lamp to inaugurate the 6th edition of the International Apparel and Textile Fair ‘VASTRA 2017’, in Jaipur. Courtesy: PIB

Textiles | On 22nd Sep 2017

Placement rate in textiles sector is 70%: Indian minister

The recent high growth of foreign direct investment (FDI) in the...

Apparel/Garments | On 22nd Sep 2017

New US FTC rule for RN used on textile product labels

The US Federal Trade Commission recently streamlined requirements...

Textiles | On 22nd Sep 2017

Messe Frankfurt acquires Source Africa, ATF textile shows

Messe Frankfurt, one of the world´s leading trade show organisers,...

Interviews View All

Yash Maniyar
Rekha Maniyar

Indian fashion market is growing at a staggering rate

Darshan Mehta
Infinium Polychem

We are spending double digit figures on R&D

Anavila Misra
Anavila Collection

Fashion shows are also encouraging and highlighting sustainable fashion

Marcel Alberts
Eurofibers

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

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

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

September 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


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