Home / Knowledge / News / Textiles / NY futures fall precipitously this week
NY futures fall precipitously this week
13
Sep '08
NY futures fell precipitously this week, with December collapsing 460 points to close at 63.86 cents, while March dropped 417 points to close at 68.82 cents.

With commodities getting hammered and the US dollar surging higher, the cotton market did not stand much of a chance to hold against this indiscriminate wave of selling by speculators and as a result it fell through the lower end of a five-week trading range without much opposition.

The relative ease with which the market went through the 66 cents support level was particularly worrisome, but in the absence of any noticeable physical activity there was simply nobody brave enough to stand in front of this south-bound freight train.

Export business has been extremely quiet recently, with the last two export sales reports showing only 162'800 running bales, bringing total sales for the season to 4.8 mio statistical bales. While total commitments are just 0.2 mio bales behind last year's pace, shipments of 1.25 mio statistical bales are lagging 0.45 mio bales behind last season and they need to pick up considerably in order to make the fairly optimistic USDA export projection of 15.0 mio bales.

The strength of the US dollar has surprised many, including us, but this rebound is not the result of improving fundamentals but rather due to the unwinding of positions by hedge funds and banks that have wagered against the dollar and are now finding themselves on the wrong side of these bets, scrambling to get out.

Expectations of a narrowing interest rate spread between the greenback and some other major currencies, notably the Euro and the British Pound, have further added to this relative strength of the US dollar in recent weeks.

However, we believe that it is only a matter of time until bearish fundamentals, which are getting more pronounced with every new government bailout, will weigh on the US dollar again. Once this happens it will probably mark the end of this brutal selloff in commodities that has clipped 22 percent off the CRB index since the end of June.

The current meltdown in the financial markets and the accompanying fear that the world economy may be headed for a severe recession have caused an extremely negative sentiment in regards to consumer spending. In the cotton market we are seeing merchants dumping inventory, while mills are reluctant to commit, even at these discounted prices.

Is this pessimistic outlook in the case of cotton justified or is the market possibly overreacting? While we don't disagree that world mill use is not at the 124.5 mio bales the USDA has been suggesting so far, it would take a massive drop in consumption to turn the balance sheet bearish, because production is currently expected to be no more than 112.1 mio bales.

Tomorrow the USDA will give us its latest supply/demand estimate and the market has been apprehensive ahead of it, with many analysts expecting a bearish set of numbers. However, while it is quite likely that the USDA will scale back demand and possibly lift ending stocks, when we look beyond the 'headline' impact and all the negative emotions du jour, we may notice that things are not quite as bad as they appear.


Must ReadView All

Building of Ethiopian textile unit by Chinese firm starts

Textiles | On 22nd Jan 2018

Building of Ethiopian textile unit by Chinese firm starts

Chinese firm Wuxi No. 1 Cotton Mill will build a textile plant in...

JD.com to invest $3.1 bn to revive industry in NE China

Apparel/Garments | On 22nd Jan 2018

JD.com to invest $3.1 bn to revive industry in NE China

To back the government’s campaign to revitalize the traditional...

SIMA makes pre-budget recommendations to Indian govt

Textiles | On 22nd Jan 2018

SIMA makes pre-budget recommendations to Indian govt

Exemption of 5 per cent goods and services tax (GST) on raw cotton,...

Interviews View All

Headhonchos
Textiles & allied industry

Textiles industry is always in the forefront in accepting latest technology

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Abhishek Pachauri

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

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Mohammad Hassan
Biax Fiberfilm

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

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace 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

January 2018

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
69.1%
No
13.4%
Skip
17.5%

Total Votes: 97

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
63.9%
No
28.9%
Skip
7.2%

Total Votes: 97

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
87.6%
No
9.3%
Skip
3.1%

Total Votes: 97

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
82.5%
No
8.2%
Skip
9.3%

Total Votes: 97


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