Home / Knowledge / News / Textiles / NY cotton futures trend higher this week led by Dec rally
NY cotton futures trend higher this week led by Dec rally
13
Sep '14
Led by a strong December that rallied 264 points to close at 68.09 cents, New York cotton futures trended higher this week.

Nearby supply worries and positive chart signals combined for a strong performance in the cotton market this week, pushing December to its highest close since July 23.

The spot month crossed above its long-term downtrend line dating back to early May, when the current bear market originated. In doing so, it also moved above its 20-, 40- and 50-day moving averages and turned momentum indicators bullish.

“What all the above means is that spec shorts got a strong buy signal this week and are now exiting some of their positions, while at the same time there may be new spec longs entering the market”, the latest Plexus cotton market report informs.

The most recent CFTC report showed that large and small specs had around 7.0 million bales in outright shorts, which is plenty of fuel to keep a rally going for a while.

Overhead trade selling counteracts this spec buying, but most traders try to avoid December and are placing their bearish hedging strategies in March and May instead.

This in turn has forced the Dec/March inversion out to 113 points as of today’s close, as December has gained nearly 200 points on March over the last three weeks.

The latest USDA Supply/Demand report added fuel to the December rally, as its numbers exacerbated nearby supply concerns.

First off the USDA lowered US beginning stocks by 150,000 bales to 2.45 million bales, which is the lowest reading in 23 years. It further cut US production by 964,000 bales to 16.54 million bales as a result of 360,000 fewer harvested acres and a drop in yield from 820 to 803 lbs/acre.

“While there may have been some abandoned dry land acres in Texas and Georgia, would it not make sense for the yield average on the remaining crop to go up”, the report queries.

Not according to the USDA, which predicts yields to be the third lowest in the last eleven seasons. This seems to contradict the USDA’s own crop condition report, which currently shows the 2014 crop as the second best in the last five seasons.

While the US numbers were supportive, especially in regards to nearby deliveries, the rest of the WASDE report looked a lot less inspiring. It forecast production increases of 1 million in India, 0.29 million bales in West Africa and 0.25 million bales in Turkey.

All these more than offset the US shortfall, while global mill use was lowered by 0.48 million mainly due to a downward revision in Pakistan, the report explains.

A worrisome trend is the slide in imports, which were lowered further this month and now amount to a mere 35.2 million bales, or 5.2 million bales less than last season and 10.6 million bales below the record 45.8 million bales of 2012/13.

The fact that China is expected to take in only 8.0 million bales this season is of course the main factor behind this drop in global trade, but the report of some other prominent markets saw their import needs lowered as well, such a Pakistan by 0.6 million bales, India by 0.3 million bales and Turkey 0.25 million bales.


Must ReadView All

Decision in UK budget to attract investment in retail: BRC

Textiles | On 24th Nov 2017

Decision in UK budget to attract investment in retail: BRC

British finance minister Philip Hammond’s announcement in his budget...

Courtesy: Shangdong Ruyi

Textiles | On 24th Nov 2017

Shangdong Ruyi to acquire major stake in Bagir

Shangdong Ruyi Technology Group Ltd, one of the leading Asian global...

Chinese e-commerce firm JD.com invests $44 mn in Tiki.vn

Apparel/Garments | On 24th Nov 2017

Chinese e-commerce firm JD.com invests $44 mn in Tiki.vn

Chinese e-commerce firm JD.com has invested $44 million in Tiki.vn, a ...

Interviews View All

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

C. Dhandayuthapani
Mag Solvics Pvt. Ltd

ITME 2016 exploited our full strength like never before

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Pranav Mishra
Huemn

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

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

November 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
68.5%
No
12.4%
Skip
19.1%

Total Votes: 89

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
61.8%
No
30.3%
Skip
7.9%

Total Votes: 89

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
86.5%
No
10.1%
Skip
3.4%

Total Votes: 89

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
80.9%
No
9.0%
Skip
10.1%

Total Votes: 89


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search