Home / Knowledge / News / Textiles / NY Cotton Futures remain under pressure this week
NY Cotton Futures remain under pressure this week
06
Jun '14
The market is in search of a solid bid, but with fundamentals and technical indicators both in bearish mode, the path of least resistance continues to be down for now. July has so far given up over 900 points since closing at 94.75 cents exactly a month ago, while December is more than 700 points below its high of 84.53 cents.
 
The liquidation of the July contract has continued in very orderly fashion, with the CFTC showing the trade just 3.7 million bales net short as of May 20 (Futures and Options combined), which is down 2.9 million bales from three weeks earlier. By contrast, a year ago the trade still carried an 8.4 million bales net short in July. We believe that the steep inversion to new crop has sped up the liquidation of any remaining basis-long positions in current crop, as forward prices offer no incentive to hold on to cotton and rolling a hedge to December is therefore of no value.
 
In other words, we have a situation in which merchants are eager to clean out their inventory and mills are equally inclined to fill their open slots for nearby shipment. This has led to some brisk business over the last couple of weeks, as sizeable quantities of Australian and US cotton have changed hands. 
 
US export sales of Upland and Pima cotton amounted to 311’900 running bales for the week ending on May 29, with 20 markets participating. 134’600 running bales were for June/July shipment, whereas 177’300 running bales were for August onwards. Shipments of 179’600 running bales were below those of recent weeks, but still quite a bit above the pace needed to make the current USDA estimate of 10.4 million statistical bales. 
 
Total commitments for the season now amount to 10.8 million statistical bales, whereof 9.3 million bales have so far been exported. New crop commitments have risen to 2.2 million statistical bales, of which we estimate that a little over half, or around 1.2 million bales, will be shipped from existing inventories. If this assumption were correct, then the remaining amount of unsold US cotton would amount to no more than 300’000 bales. For the reasons stated above, we may see just about every last bale of US cotton sold and shipped by the end of summer, leaving the US pipeline more or less empty by the time new crop arrives. We can’t remember a time when US supplies were tighter than they currently are! 
 
With that in mind, the market needs to temper its expectations in regards to US export sales for the remainder of the marketing year. Since there is hardly anything left for sale, additional commitments won’t amount to much! Even new crop sales will probably slow down, since mills are not covering that far forward these days and with a US crop to that is showing a lot of promise, no one seems to be in a hurry to cover.


Must ReadView All

Textiles minister Smriti Irani lighting the lamp to inaugurate the 6th edition of the International Apparel and Textile Fair ‘VASTRA 2017’, in Jaipur. Courtesy: PIB

Textiles | On 22nd Sep 2017

Placement rate in textiles sector is 70%: Indian minister

The recent high growth of foreign direct investment (FDI) in the...

Apparel/Garments | On 22nd Sep 2017

New US FTC rule for RN used on textile product labels

The US Federal Trade Commission recently streamlined requirements...

Textiles | On 22nd Sep 2017

Messe Frankfurt acquires Source Africa, ATF textile shows

Messe Frankfurt, one of the world´s leading trade show organisers,...

Interviews View All

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Headhonchos
Textiles & allied industry

Textiles industry is always in the forefront in accepting latest technology

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Johan Berlin
InvestKonsult Sweden AB

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

Lynda Kelly
Suominen Corporation

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

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Tony Ward
Tony Ward

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

Yash P. Kotak
Bombay Hemp Company

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

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