Home / Knowledge / News / Textiles / Volatility in cotton market seems to be on decline
Volatility in cotton market seems to be on decline
28
Jun '08
Once upon a time, long ago, cotton marketing was the same year after year. As government controls began to come off in the late 1960's and early 1970's there were only minor changes, as one could stay in New York and peg the market for the full year.

By 1977, if one wanted to get an understanding of the coming year's cotton market they had to look at commodity price ratios, take a trip to Memphis, talk via telephone one or two Texas cotton merchants, nothing else. There was almost no mention of demand-year after year. Then by the late 1980's, with globalization in its infancy, and the demand side of the price equation becoming important, both commodity price ratios and technicals (charts and graphs) drew additional attention.

Globalization was the key word of the 1990's as the U.S. cotton industry came to realize that world events, both political and economic, had a direct influence on the cotton market. With globalization just being understood, the 2000's gave the market a full shot of billion dollar fund managers with pension funds and individual state retirement funds being sunk in to commodity trading, with cotton getting its fare share. These managers call it "investing." Whoever heard of the futures contract referred to as an investment? Now, there are billions "invested" in cotton speculation, as well as all other commodity futures markets.

The crux of all this: Not only is each year different, today's cotton market is different from the prior day's market. Every morning brings a new set of fundamentals that impact the market. Stability one day is followed by a limit move the next.

Once volatility seems to decline, it skyrockets the next; day after each day is a new beginning. Therefore, marketing is more important than ever before, simply because of the price volatility the seen almost daily. Fortunately for growers, as volatile as the market is today, it is in a "resting" period waiting for the blow off that will come later in 2008 or in 2009 as the world's inventory of cotton declines and more and more land area is devoted feed crops, food crops and oilseeds.

On Monday, June 30, USDA will release its June Plantings Report. In March growers indicated their intentions to plant about 9.5 million acres. However, actual plantings have fallen possibly as low as 8.4 million acres. Expect the range to be between 8.4 and 9.0 million acres, with a bias to the low side. Watch for any "clarification" from USDA in the report.

Since the report is "officially" a planted acreage report, any plantings that have already been abandoned will still be counted in the report. Thus, the guessing game is already in process with respect to how much acreage has already been abandoned. Is it 500,000 acres or is it 1.5 million acres? Will the crop be 12.0 million bales or 12.5 million?

U.S. export sales for the ending June 19, 2008 totaled only 29,000 RB, a marketing year low. Upland sales were only 19,100 RB. Pima sales were 9,900 RB. Indonesia (9,200 RB); Vietnam and Thailand were the primary buyers of Upland. United Arab Emirates (3,200 RB); Japan and India were the primary buyers of Pima. It is evident from the last two weekly export reports that the market has left demand behind.


Must ReadView All

Indian govt approves special package for leather, footwear

Textiles | On 16th Dec 2017

Indian govt approves special package for leather, footwear

The Union Cabinet chaired by PM Narendra Modi has approved a special...

EU parliament resolution calls for Cambodia sanctions

Apparel/Garments | On 16th Dec 2017

EU parliament resolution calls for Cambodia sanctions

Following the ongoing crackdown in Cambodia on the opposition and...

Affordable prices to be hit if US pulls out of NAFTA: NRF

Apparel/Garments | On 16th Dec 2017

Affordable prices to be hit if US pulls out of NAFTA: NRF

US retailers’ ability to offer consumers quality products at...

Interviews View All

Headhonchos
Indian fashion industry

Cotton consumption will keep growing in the Indian fashion industry

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

Yashiki Gumber
Sahiba Fabrics

Fabric does not restrict us from fashion trends

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...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Mark Paterson
Technical Absorbents Ltd

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

Lynda Kelly
Suominen Corporation

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

Suresh Patel
Sidwin Fabric

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

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

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

December 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
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

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
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

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
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

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
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


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