Interviews
New York cotton futures regain lost ground
10 May '08
3 min read
USDA did increase its estimate of U.S. ending stocks to 9.9 million bales, up 200,000 bales. Domestic usage was lowered 100,000 bales, to 4.6 million. Exports were lowered 300,000 bales and are now estimated at 14.2 million. While exports could slip as much as another 200,000 bales, it is the increasing level of carryover that is worrisome to the market.
Nevertheless, early estimates for 2008-09 suggest U.S. production will fall to 14.5 million bales (I think lower) and exports will rebound to 14.5 million. While 2008-08 domestic use is expected to slip another 300,000 bless, down to 4.3 million, this would drop 2008-09 carryover to 5.6 million bales at the same time world carryover was falling to 55.5 million bales. Therefore, the supply demand balance sheet will only grow tighter.
Bullish export sales resulted during the week ending May1, 2008 and net sales totaled 586,100 RB. Upland sales totaled 563,900 RB as China made second consecutive weekly large purchases of Upland. Pima sales were 22,200 RB. China (311,000 RB); Turkey and Indonesia were the primary buyers of Upland; the same top three as last week. China (13,100 RB); India and Germany were the primary buyers of Pima.
Export shipments continue to lag the pace necessary to meet USDA's export estimate of 14.2 million bales, an estimate that was lowered in the USDA supply demand report. However, weekly exports were significantly better than the prior week, totaling 291,800 RB with Upland accounting for shipments of 269,700 RB. Pima shipments were 22,100 RB. Primary destinations for Upland were China (101,400 RB); Turkey and Mexico. The primary destinations for Pima shipments were China (7,400 RB); India and South Korea.
The coming weeks, while continuing to see some volatile trading sessions, will continue to gyrate around the 69-73 cent level, basis July and the 73-79 cent level, basis December.
Nevertheless, early estimates for 2008-09 suggest U.S. production will fall to 14.5 million bales (I think lower) and exports will rebound to 14.5 million. While 2008-08 domestic use is expected to slip another 300,000 bless, down to 4.3 million, this would drop 2008-09 carryover to 5.6 million bales at the same time world carryover was falling to 55.5 million bales. Therefore, the supply demand balance sheet will only grow tighter.
Bullish export sales resulted during the week ending May1, 2008 and net sales totaled 586,100 RB. Upland sales totaled 563,900 RB as China made second consecutive weekly large purchases of Upland. Pima sales were 22,200 RB. China (311,000 RB); Turkey and Indonesia were the primary buyers of Upland; the same top three as last week. China (13,100 RB); India and Germany were the primary buyers of Pima.
Export shipments continue to lag the pace necessary to meet USDA's export estimate of 14.2 million bales, an estimate that was lowered in the USDA supply demand report. However, weekly exports were significantly better than the prior week, totaling 291,800 RB with Upland accounting for shipments of 269,700 RB. Pima shipments were 22,100 RB. Primary destinations for Upland were China (101,400 RB); Turkey and Mexico. The primary destinations for Pima shipments were China (7,400 RB); India and South Korea.
The coming weeks, while continuing to see some volatile trading sessions, will continue to gyrate around the 69-73 cent level, basis July and the 73-79 cent level, basis December.
O.A. Cleveland
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