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

Courtesy: Reliance Industries

Textiles | On 24th Apr 2017

Reliance’s FY17 revenue from petrochemicals up 12.2%

Increase in prices across polymers and polyester chain has...

Textiles | On 24th Apr 2017

India, Kazakhstan to increase cooperation in textiles

Indian and Kazakhstan are deliberating upon increasing cooperation in ...

Textiles | On 24th Apr 2017

GST reflects 'One nation, One aspiration' spirit: Modi

Prime Minister Narendra Modi has said that the Goods and Services Tax ...

Interviews View All

Janak Dhamanwala & Sunil Dhamanwala
Jansun

Moving towards sustainability is also a social change

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Ritu Kumar
Label Ritu Kumar

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

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

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
April 2017

April 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