Home / Knowledge / News / Textiles / Drop in worldwide prices of cotton continues
Drop in worldwide prices of cotton continues
27
Oct '08
After moving slightly more than ten cents above the AWP, cotton began last week with a record setting 602 point swing on Monday to the downside. Cotton prices then began to successfully distance themselves from outside markets in near schizophrenic fashion. On any given day stocks would be up and cotton down. The next day, stocks would be down and cotton up.

Even more confusing were the Dec/March differences. Generally speaking, as the market moves toward the delivery period, any changes in the differences between the spot month and the next often reflect changes in the fundamental situation. In this case, the December to March spread closed to the tightest level in the life of the contracts only to shoot skyward on Thursday. This sudden change in the difference between these months invoked a lot of talk but no answers.

Panic liquidation continued unabated in both equities and commodities. The CRB Index dropped to lows not seen in five years; the Baltic Dry Freight Index six years. Fridays break in the CRB Index was the 23rd such in the last 29 sessions. Crude oil settled at a 17-month lows despite OPEC's decision to cut output by 1.5 million barrels a day. On the other hand, the dollar index has gained during 19 of the last 24 sessions.

Cotton futures, which have lost ground 26 times in the last 38 sessions for a total of almost 24 cents, settled on contract low closes. Losses were not limited to the US as China's cotton prices continued to drop as well. So far the NDRC attempt to stabilize prices has had little effect.

The fundamental outlook took a sour turn last week when Cotlook reduced its estimate of global usage to 115.5 million bales, a reduction of 2.5 million bales from its month earlier estimate and a whopping 6.8 million bales below USDA's October estimate. They cut Chinese usage about 900,000 bales below their month lower estimates and are now about 5 million below USDA's view of Chinese needs.

Technically, the near term objective of 5400 was met a week ago. However, the bounce was only a two day phenom. Additionally, the buy signal generated a week ago by the 20 stochastics was negated Friday.

The markets indecisiveness is indicative of a period of consolidation. Right now it would appear that the best the bulls can probably expect is a consolidation of prices between 4550 and 5250. A new low close would portend at test of 4300. The 20-21 day moving averages are coming down quickly so a close above 5250 would portend another test of the upside.

Swiss Financial Services

Must ReadView All

Textiles | On 22nd May 2017

GST to be biggest achievement of Modi govt: ASSOCHAM

Goods and Services Tax (GST) which is near a roll-out would be the...

Textiles | On 22nd May 2017

Maintaining NAFTA benefits is crucial: Cotton council

The US must remain a participant in a vibrant North American Free...

Apparel/Garments | On 22nd May 2017

Retailers ask Congress not to go for consumption tax

The National Retail Federation has asked US Congress to focus on...

Interviews View All

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Lynda Kelly
Suominen Corporation

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

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Jay Ramrakhiani
Occasions Elegance Wear

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

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:
May 2017

May 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