Home / Knowledge / News / Textiles / NY cotton futures show mixed performance this week
NY cotton futures show mixed performance this week
Jan '14
Current crop futures continued to move higher in search of willing sellers, as speculators as well as the trade were both inclined to buy the market, albeit for different reasons. Speculators seemed to like the price action and continued to add to their net long position, while the trade was forced to play defense as the large amount of rolled call options bears witness to.

Since falling into a hole in October, when prices dropped about 10 cents from the mid-80s, the market has managed to reclaim all of its losses over the last two months and is once again trading in familiar territory. As you may remember, the market spent most of last year in a relatively narrow range between 82 and 88 cents, with a few short-lived spikes above 90 cents.

Looking at the statistical picture it would make sense for the market to trade in a similar price pattern as last year. With the ROW surplus once again being absorbed by Chinese imports, inventories outside China are expected to remain little altered.

The ROW started the season with beginning stocks of 38.8 million bales and is forecast to end it with 39.3 million bales at the end of July. Exporters like the US (-0.9 million) and India (-0.4 million) are projected to end up with slightly smaller stocks, while Southern Hemisphere producers Brazil (+0.93 million) and Australia (+0.68 million) are expected to see their inventories go up.

Apart from statistical similarities there are also some other interesting parallels to last season. For example, the latest CFTC report shows that large speculators owned nearly the same amount of net longs as a year ago, 3.27 million bales as of January 14 versus 3.15 million a year earlier. The trade was 9.48 million bales net short last week, versus 10.86 million a year ago, while Index Funds are about a million bales less net long than last January at 6.03 million bales.

A year ago speculators continued to add longs, as their net long position more than doubled to 7.6 million bales by March 15, when the spot month reached a high of 93.93 cents. Open interest in futures had risen to 213’417 contracts by that time (currently 185’859) and the trade tried desperately to stop the market in its tracks by boosting the certified stock from 108’414 bales on January 23, 2013 to 420’922 bales on March 15. However, it wasn’t until the trade had covered most of its short before the market finally sold off and eventually dropped to a low of 80.82 cents by April 24.

Is it déjà vu all over again? We don’t know whether history will repeat itself, but the dynamics are conspicuously similar. When we look at the unfixed ‘on-call’ position, the situation is potentially even more explosive this season. Last week’s on-call sales rose by another 344’200 bales, of which 287’800 bales were in current crop.

While March saw its on-call position drop by about 100’000 bales, there were over 380’000 bales added in May and July, which by the way hints at another stellar US export sales report tomorrow. Total unfixed on-call sales now amount to 5.95 million bales, of which 5.37 million are in current crop. By comparison, a year ago total unfixed on-call sales amounted to 5.18 million bales, of which just 3.90 were in current crop. In other words, there are a lot more procrastinators this time around!

Must ReadView All

Union textiles minister Smriti Irani addressing at the Texprocil Annual Export Awards. Courtesy: PIB

Textiles | On 22nd Oct 2016

Govt to extend special package to home textiles segment

The Central government is likely to extend the recently approved Rs...

Reebok Liquid Speed Grey. Courtesy: Business Wire

Apparel/Garments | On 22nd Oct 2016

Reebok’s Liquid Factory brings sneaker creation to US

Reebok, a pioneer in the sporting goods industry, has brought sneaker ...

Courtesy: GHCL

Textiles | On 22nd Oct 2016

GHCL to invest Rs 67.25 crore in textile division

Chemicals and textiles firm GHCL will invest Rs 67.25 crore in its...

Interviews View All

Anshul Sood

‘Indian footwear market is nascent and largely a trend follower’

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Marcel Alberts

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...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer Prathyusha Garimella is known for blending...

Silvia Venturini Fendi
Fendi s.r.l

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

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

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

October 2016

October 2016

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


Browse Our Archives


Advanced Search