Home / Knowledge / News / Textiles / NY cotton futures continue to slide this week
NY cotton futures continue to slide this week
May '14
It was a combination of technical weakness and economic worries that weighed on the market this week, as the spot month moved perilously close to the important 90 cents support level, settling at its lowest level since March 13.
From a technical point of view, we had a negative crossover of the 7-day vs. the 21-day Exponential Moving Averages earlier this week, which over the years has served as a reliable timing tool for getting in and out of positions. This is the first crossover since early December, when this measure gave us a buy signal that remained in force until this week. A look at the candlestick chart shows that sellers are now firmly in control and threaten to push the market through the 90 cents support level, which would likely trigger additional sell stops. 
After several months of positive money flows into the commodity complex, fund managers have started to pull some money off the table, according to the latest CFTC report. Net long positions in Futures and Options across 13 agricultural commodities saw their biggest drop in seven months and the outflow seemed to continue this week. Better crop prospects and a dismal economic outlook for China and Europe were among the reasons cited for this ‘risk off’ move by hedge funds. 
However, not all commodities saw their speculative net long positions reduced, among them cotton, where specs increased their net long by 0.56 million to 6.34 million bales during the week of May 6. The trade was on the other side adding 0.59 million bales to its net short position, which amounted to 12.77 million bales, of which around 6.8 million bales were in July according to the ‘disaggregated’ CFTC report. Although overall open interest has declined by about 3’000 lots since May 6, there hasn’t been any widespread spec exodus just yet, although some of them have started to roll their longs from July to December, which is putting pressure on the inversion.
Last Friday’s USDA supply/demand report contained no major surprises, which is why the market had such a muted reaction to it. The story remains more or less the same as in the previous 3 seasons, i.e. a production surplus in the ROW, with Chinese imports absorbing most of it.
Interestingly, ROW production and mill use numbers for 2014/15 are nearly identical to this season, with ROW production at 85.96 million (versus 85.13 million) and mill use at 74.83 (versus 73.88 million), resulting in a surplus of 11.13 million (versus 11.25 million this season). The main difference is the lower expectation for Chinese imports, which are estimated at 8.5 million bales in 2014/15, compared to 12.75 million this season. This should allow ROW stocks to recover slightly, from a relatively tight 38.35 million bales inventory to a more ample 41.15 million bales by the end of next season.

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

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Victor Chao

‘In future, clothing boundary lines will become increasingly blurred.’

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Silvia Venturini Fendi
Fendi s.r.l

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

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

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


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