While March futures are not far from this level, the spot month looks out of line and so do not be surprised to see the inversion fade away as the delivery period approaches and one may even see carrying charges reappear before December goes off the board.
New York futures advanced this week, with December gaining 146 points to close at 64.50 cents/lb, while March moved up 114 points to close at #
US export sales of 203,900 running bales for both marketing years were slightly above expectations, as improved harvesting conditions finally allowed some pent-up demand to be met. Buying interest was broad-based, as no less than 19 markets wanted a share of the action.
Shipments of 72,700 running bales are still lagging behind, but one should see the pace pick up considerably in the weeks ahead. Total commitments for the season now amount to 6.1 million statistical bales, which is about a million bales more than at the same time last season.
Exports of just 1.1 million bales on the other hand are 0.7 million bales behind last year’s pace.
The current market is characterized by spec short covering and scale up trade selling. The back and forth battle between these two forces is likely to last for a while longer, but as one approaches the December notice period, the influence of the cash market will increasingly be felt, which should keep futures prices in check.
The weather premium is now all but gone and as supply pipelines in the Northern Hemisphere fill up; one can expect to see fierce competition for market share between the three export heavyweights West Africa, India and the US.
Although government support may delay supply pressure for a while, it is difficult to envision a market that trades anything but sideways to lower in the foreseeable future. (AR)
Fibre2fashion News Desk - India
20240830145952.gif)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
