Home / Knowledge / News / Textiles / Market continues to bounce back this week
Market continues to bounce back this week
29
Aug '08
NY futures lost some ground this week, with December dropping 48 points to close at 69.36 cents, while March fell 77 points to close at 73.99 cents.

The market continued to bounce back and forth in rather erratic fashion this week, but it was unable to generate any momentum whatsoever. Even though yesterday's rally looked promising at first and volume was picking up, the bulls' enthusiasm was tempered this morning when open interest showed a decline of over 1'200 contracts.

This indicated that the run up was primarily a function of short-covering rather than any new buying, and as a result the market quickly retreated towards the middle of its recent trading range. Over the last four weeks the December contract has closed within a narrow range between 71.89 and 67.08 cents and turnover has been lackluster, while open interest is still at the same level it was two months ago when December was trading over 80 cents.

The market's performance this week was certainly disappointing, because there were several factors that could have inspired a move higher. For one there is the threat by Hurricane Gustav, who is on track to hit the cotton areas of the Delta early next week, almost exactly three years after Katrina devastated the region.

Hurricanes typically do not cause that much damage to cotton, but this time around it may be different because the whole Delta region has received excessive moisture over the last 30 days that has already led to some boll rot and the last thing these fields need right now is another round of 4 to 8 inches of rain.

Following behind Gustav is Hurricane Hanna, which is on course to make landfall somewhere near Florida or the Southeast next Tuesday, where several cotton areas have just been visited by Hurricane Fay. It looks like the old saying 'as goes South Texas so goes the US crop' still has some validity, since we have yet to see an area that makes it to harvest without any problems.

Another factor that should act in support of cotton prices is today's Census Bureau report called "Consumption on the Cotton System and Stocks". Not only was domestic consumption for July reported at a pace of 4.65 mio bales, but what caught our eye were the carry-over stocks of just 9.53 mio running bales, which include an estimated 700'000 bales under 'Elsewhere', mostly bales in transit or in storage locations not captured by the Census Bureau.

First of all, with the transportation problems we have had recently this 'Elsewhere' number seems to be on high side, but even if we were to believe it, the US Census Bureau stocks would still be about 0.4 mio statistical bales below the latest USDA ending stocks number of 10.2 mio bales, because the 9.53 mio running bales of the Census translate roughly into 9.8 mio statistical bales.

Therefore, what is likely to happen is that the USDA will eventually adapt the lower ending stocks number of the Census, a fact that seems to have gone unnoticed by the market so far.


Must ReadView All

Arvind Limited executive directors Punit Lalbhai (left) and Kulin Lalbhai explaining the project to Gujarat chief minister Vijay Rupani. Courtesy: Arvind Ltd

Apparel/Garments | On 18th Oct 2017

Arvind to set up mega apparel facility in Gujarat

Arvind Limited, one of India’s largest textile to retail...

Clash over monetary payment by UK at Brexit talks

Textiles | On 18th Oct 2017

Clash over monetary payment by UK at Brexit talks

The European Union (EU) and the United Kingdom (UK) are clashing over ...

Cotton stocks accumulating everywhere outside of China

Textiles | On 18th Oct 2017

Cotton stocks accumulating everywhere outside of China

Global cotton stocks outside of China are expected to rise by nearly...

Interviews View All

Hannah Lane
Redress

Encouragement from brands will motivate supply chains to become more...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Mohammad Hassan
Biax Fiberfilm

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

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Urs Stalder
Sanitized AG

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

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Anisha Chaudhari
Threads & Shirts

Threads & Shirts is a freshly-tailored concept providing men/women a...

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

October 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
77.3%
No
13.6%
Skip
9.1%

Total Votes: 66

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
60.6%
No
28.8%
Skip
10.6%

Total Votes: 66

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
84.8%
No
10.6%
Skip
4.5%

Total Votes: 66

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
74.2%
No
12.1%
Skip
13.6%

Total Votes: 66


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