Home / Knowledge / News / Textiles / Cotton market not focussed on cotton fundamentals
Cotton market not focussed on cotton fundamentals
Mar '08
Bonkers and Parabolic; the cotton market according to Mike Stevens...My "bridge too far" last week seems a bit immature with cotton prices soaring more than 500 points this week. Yet, this week's rapid advance will just mean the astrologist's Big Bang theory will have specific meaning to the cotton market the near future.

The futures market, in no way, is trading near term the fundamentals of cotton, but rather perceptions of the future. For now, the market is considerably overbought, based on near term fundamentals (supply and demand). Yet, the market is very reflective of market conditions for the New York December 2008 contract and contracts through 2010.

The parabolic analogy reminds me of taking paregoric for stomach discomfort--when it was legal--it made, for those with a prescription, everything in the world perfect; and we know human interaction is rather imperfect and commodity markets are nothing more than human interaction.

How can one go against the higher prices? If the May contract can post a solid close above 80 cents, the short term sky can be grasped within our hands. However, the inability to move above 80 cents during the coming week, in not sooner, will signal a pull back to 72-75 cents.

The price bridge has been constructed "too far" for the near term. Yet, it has a very solid footing for the 2009 and 2010 New York contracts. Specifically, I am short term bearish and long term bullish. The nearby contracts could experience as much as a 500 point correction. Yet, the long term expiry contracts are 1000 to 3000 points higher.

The crux is that the cotton market is not focused on cotton fundamentals, but rather the fundamentals associated with the grain contracts, relative to ethanol (energy) demand and the food crisis relative to vegetable oil consumption. Neither the energy crisis (man's dependence on fossil fuels) nor the food crisis (vegetable oil, non trans-fat) can see a near term solution before 2010. Thus, the daily grain and oilseed markets will continue to dominate the cotton market; prohibiting cotton from trading on its own fundamentals.

Must ReadView All

Textiles | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Nuno Venda

‘There has been an increase in demand for water based inks, rather than...

Vidhyaa Shankar. S
A Ganapathi Chettiar

'The usage of knits is getting into the boundaries of woven fabrics'

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Paolo Ocleppo
Sandvik Hyperion

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

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Sonam & Paras Modi

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Robert Brunner

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

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

January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search