Home / Knowledge / News / Textiles / NY cotton futures continue to move higher this week
NY cotton futures continue to move higher this week
Apr '14
The July contract continued to frustrate trade shorts this week, as it moved to within 41 points of its recent high of 93.61 cents, set on March 28. For the last 35 sessions, since March 6, July has closed no lower than 89.86 and no higher than 93.61 cents, a relatively tight band of just 375 points. 
A couple of weeks ago it looked liked the market was finally starting to reverse to the downside, but there was plenty of scale down trade buying to absorb the 1.5 million bales in net selling by the spec sector over the last three weeks. Obviously some large spec traders have closed out their positions in the cotton market during that time frame, as long accounts have dropped from 133 to currently just 104. 
However, with the market being able to regain its composure, a technical sell-off has been averted for now and we have to assume that the remaining spec long is in strong hands. This may pose a problem for the still large contingent of basis-longs and unfixed on-call sales. We estimate that the trade short in July is made up of about 6.0-6.5 million bales in basis-long positions (US, Australian, South American, African and Indian origins), 3 million bales in unfixed on-call sales and perhaps a million or so in outright shorts. 
Paradoxically, a bearish price outlook for cash prices going forward may actually act in support of July futures. As traders fear a drop in the cash market, they have a greater sense of urgency to get out of existing physical positions, which requires them to buy back their short futures. If this occurs in an illiquid market environment, in which specs are not prepared to sell their remaining longs, then prices will have to rise in search of willing sellers. So far the trade has been reluctant to get out of its upside down basis-long, but time is starting to run out and traders are getting increasingly more nervous about this situation. 
If last week’s US export sales are any indication, traders will use every opportunity to lighten up on their remaining current crop positions. For the week that ended on April 17, a total of 152’000 running bales of Upland and Pima cotton were committed, of which 132’300 bales were for shipment in the next three months. Although China was the largest buyer at 112’500 bales, there were a total of 17 different markets participating, which shows that there is still broad-based demand for nearby US cotton. 
Total commitments for the current season now amount to around 10.1 million statistical bales, of which 8.0 million have so far been shipped. We keep hearing some talk about potential cancellations of remaining commitments in an effort to free up tenderable grades for delivery, but we feel that this may be more wishful thinking than anything rooted in reality. There have been some cancellations almost every week since January, but that hasn’t stopped net sales from increasing quite substantially. More importantly, shipments have been excellent in recent weeks, signaling that mills actually do want their cotton. 

Must ReadView All

Textiles | On 24th Oct 2016

Indian govt plans roadshows to promote textile exports

The Indian government has planned to conduct roadshows to boost the...

Textiles | On 24th Oct 2016

TPP may hit roadblock

The 12-member Trans-Pacific Partnership (TPP) that was signed earlier ...

Textiles | On 24th Oct 2016

Baba Ramdev’s Patanjali to enter textile manufacturing

Patanjali Ayurved, an enterprise initiated by yoga guru Baba Ramdev,...

Interviews View All

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Sonia Agarwal

‘The terms eco-friendly and organic are common but everyone perceives them ...

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Giorgio Mantovani
Corman S.p.A

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

Johan Berlin
InvestKonsult Sweden AB

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

Urs Stalder
Sanitized AG

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

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Pranav Mishra

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

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


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