Home / Knowledge / News / Textiles / Cotton prices may touch a seasonal low
Cotton prices may touch a seasonal low
25
Aug '08
After spending three light volume sessions trying to bounce off 67 cents, December cotton finally broke through to the downside mid-week, hitting sell stops and attracting fresh selling that took that contract to lows not seen in almost a year.

However the break went nowhere and in fact turned out to be a bear trap. Prices reacted to one of the most reliable technical indicators, an outside range reversal, by rallying nearly 3 ½ cents over the next two sessions.

Traders were hard pressed to attach cotton's late week rally to any news story concerning supply demand fundamentals.

Then as the week came to an end the action in cotton was actually quite impressive considering the extreme weakness in the outside markets Friday.

However, despite the sharp 1,100 point sell off, the CRB still closed an impressive 1,200 higher for the week. In fact commodity prices retreated globally Friday, erasing most of the previous days gains. The end of the week break seemed to be sparked by the sharp drop in crude oil and a corresponding rally in the US Dollar.

Cotton, on the other hand, more or less ignored the other markets and closed only slightly lower on the lightest volume in four weeks. December cotton lost 21 points Friday settling at 6963 but that was still up 255 for the week.

The cotton markets inability to establish a sustained move in either direction has been evident in the weekly spec/hedge report. The speculator seems to have waffled between being very slightly net long to being very slightly net short the last five or six weeks with neither side showing a lot of conviction. Commercials on the other hand have reduced their market positions on a fairly steady basis.

Last week's bounce came from 6700 which had been the downside target at 6700. However, it will now take a close above 7145 to silence skeptics and attract the type bullish technical following to challenge major trend line resistance between 7400 and 7500.

While a number of analysts feel that cotton is in the process of making a seasonal low, the tremendous amount of cotton hanging over the market has been a real drag on the market's momentum on each rally attempt. As we said last week and will continue to remind, it is an absolute certainty, cotton will eventually participate in the acreage battle for the 2009 crop.

Swiss Financial Services


Must ReadView All

Textiles | On 23rd Jun 2017

Textile ministry organises training workshop on GST

The ministry of textiles had organised training workshop on GST which ...

Apparel/Garments | On 23rd Jun 2017

Uware Brands into licensing agreement with Polaroid

Uware Brands has entered into a licensing agreement with Polaroid for ...

Textiles | On 23rd Jun 2017

Ralph Lauren ex-president Tiger of Sweden's new CEO

Hans-Christian Meyer, former president of Ralph Lauren Corporation,...

Interviews View All

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Paolo Ocleppo
Sandvik Hyperion

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

Karan Arora
Karan Arora

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

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

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

news category


Related Categories:
June 2017

June 2017

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

SUBSCRIBE


Browse Our Archives

GO


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