Home / Knowledge / News / Textiles / NY cotton futures pulls back this week
NY cotton futures pulls back this week
22
Feb '14
The liquidation of the March contract proceeded in a speedy and orderly fashion, as open interest was down to just 6’393 contracts or 639’300 bales as of this morning.
 
With another 3’300 contracts trading, most of which are believed to liquidate existing positions, any last minute fireworks become unlikely as March enters its notice period on Monday. 
 
Remaining open interest won’t be much more than the current certified stock of around 252’000 bales, although it remains to be seen whether the current owners are willing to give it up that easily.
 
When a futures contract approaches its notice period we often see it converge with the cash market, and this time appears to be no different. With March at around 86 cents, it is definitely in the vicinity of US spot prices, which should spark some interest in the certified stock based on its cash value alone, regardless of whether there is enough carry on the board or not.
 
Based on the most recent open interest, CFTC and on-call figures, it seems safe to say that the trade has simply postponed the day of reckoning by rolling positions and fixations from March to May. 
 
This week’s pullback is giving traders hope that a momentum shift might flush out some spec longs and thereby lead to a deeper correction, but it doesn’t change the fact that the trade still needs to buy back and/or fix a large amount of contracts before July goes off the board. 
 
Total open interest in the futures market stood at 168’307 contracts as of this morning, of which 104’083 were in May. This is considerably less than a year ago, when total open interest amounted to 196’820 contracts, of which 137’530 belonged to May. 
 
This difference is easily explained by the smaller US crop and the tighter availability of cotton around the globe, since there are fewer bales that need to be hedged. Likewise we have a smaller trade net short position at 10.4 million bales, which is still sizeable, but nevertheless quite a bit less than the 16.1 million bales of a year ago.
 
Considering these reduced overall positions it is therefore all the more surprising that unfixed on-call sales are so much larger this season. The latest on-call report as of last Friday showed hardly any improvement, as unfixed on-call sales in March, May and July still amounted to 5.49 million bales. 
 
While March saw its balance drop by 2’868 contracts, May and July increased by nearly as much, adding a combined 2’663 contracts. 

Must ReadView All

Textiles | On 20th Feb 2017

UK textile & apparel exports up 7.05% in 2016: UKFT

The exports of apparel and textiles from the UK have increased by...

Textiles | On 20th Feb 2017

Himatsingka Seide incorporates subsidiary in Europe

Himatsingka Seide Ltd, one of the largest producers of home textiles...

Textiles | On 20th Feb 2017

Sri Lanka's textile exports rise 2.3% in Jan-Oct '16

Exports of textiles and garments from Sri Lanka increased by 2.3 per...

Interviews View All

Janak Dhamanwala & Sunil Dhamanwala
Jansun

Moving towards sustainability is also a social change

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

C. Dhandayuthapani
Mag Solvics Pvt. Ltd

ITME 2016 exploited our full strength like never before

Larry L Kinn
Suominen Corporation

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

Mohammad Hassan
Biax Fiberfilm

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

Urs Stalder
Sanitized AG

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

Silvia Venturini Fendi
Fendi s.r.l

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

Yash P. Kotak
Bombay Hemp Company

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

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

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