Home / Knowledge / News / Textiles / NY cotton futures trade sideways this week
NY cotton futures trade sideways this week
21
Dec '13
After stair-stepping four cents higher last week, the market finally ran into some resistance, but it still managed to stay above the technically important 82.00 cents level.

The latest CFTC report confirmed that speculators were the driving force behind the market’s advance, as they bought nearly 11’400 contracts net between December 4 and 10, while the trade was on the other side selling over 10’700 contracts, with Index Funds accounting for the difference with net sales of 700 contracts.

However, since the market had its biggest move on December 11, we are likely to see another large increase in spec longs and trade shorts in tomorrow’s CFTC report. We estimate that speculators are now close to 2.0 million bales net long, while the trade has probably boosted its net short to around 8.0 million bales, with Index Fund longs making up the remaining 6.0 million bales.

Speculators certainly have plenty of room to expand their net long if they decided to do so. Earlier this year, during the rally in March, speculators carried a net long of nearly 9.8 million bales. However, with momentum indicators still flashing overbought signals, specs are in no hurry to chase the market higher and instead prefer to wait for pullbacks before committing additional funds.

The trade has been a steady seller into this rally, as producers in a number of origins have made additional supplies available, which merchants bought and hedged with short futures. This has resulted in an increase in the ‘basis-long’ that merchants own, but with basis levels weakening it is doubtful that this position will continue to grow.

The problem with basis-long positions of non-US origin is that the long side consists of physicals that are still in abundant supply (Indian, West African, Australian, Brazilian, Central Asian), while the futures short resides in a fairly tight US market. We therefore believe that as a next step merchants may want to unwind some of their basis-long, which requires the buying back of futures and thereby adds to underlying support.

The increase in on-call sales constitutes another element of support. As prices are headed higher, mills prefer to buy their supplies on-call in the hope of fixing the price at a more favorable level down the road.

Last week alone on-call sales increased by 386’000 bales and they now amount to 5.34 million bales, whereof 4.9 million are on current crop March, May and July. Many buyers still don’t seem to realize that they are essentially taking a short position in the US market, which is getting tighter with every week of stellar export sales.

US export sales for the week that ended on December 12 were once again surprisingly strong at 242’200 running bales for the current marketing year and 6’600 bales for 2014/15, with a total of 17 different markets wanting a piece of the action. For the current season we now have total commitments of 7.3 million statistical bales, of which 2.7 million bales have so far been exported.


Must ReadView All

Sanjay K Jain, managing director, TT Ltd

Textiles | On 21st Sep 2017

TT’s Sanjay Jain elected new chairman of CITI

The Confederation of Indian Textile Industry (CITI), the apex body...

Textiles | On 21st Sep 2017

NRF urges US lawmakers to lower corporate tax rates

The National Retail Federation (NRF) has written to the US Senate...

Apparel/Garments | On 21st Sep 2017

UK fashion exports £10.7 bn in 2016; highest till now

Exports of British fashion goods rose to £10.7 billion in 2016, the...

Interviews View All

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Lynda Kelly
Suominen Corporation

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

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

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