Home / Knowledge / News / Textiles / Cotton prices continues under pressure
Cotton prices continues under pressure
09
Mar '09
Cotton prices continued under pressure the early part of the week, dropping to its lowest level since before Thanksgiving. Fears over the unwinding of the US and world economies continued to weight heavily on nearly all markets. Cotton finished with lower lows and lower highs for the the fifth consecutive week. It was the sixth lower weekly close for May which lost 183 for the week while December was 245 lower for the period.

In the last three weeks more than one and a quarter million bales have been registered by US merchants for export – although it is believed that one particular shipper that captured most of that business.

There is speculation that shipments have been much slower than sales due to two possible factors: first off, there could be trouble securing the letters of credit necessary and the other is that some of the sales might be duplications to bring down the averages of higher priced sales. Nevertheless, it was encouraging that shipments last picked up to a pace not seen in three months.

Encouraging news from China sparked a midweek bounce but unfortunately was more than offset by additional depressing domestic news.

The announcement from China that they intend to add to their stimulus package plus word of a rebound in their measure of manufacturing sparked a huge rally that spilled over to European US stocks and commodities at least temporarily. China has become the center of world growth with many expecting that country to lead the world out of these tough times.

However, our Federal Reserve's latest assessment of economic conditions that the contraction in U.S. economic output deepened in the first two months of the year with no turnaround expected anytime soon. Unfortunately, cotton was unable to hold it's rally midweek and faded in the homestretch.

Next Wednesday's USDA supply/demand report is not expected to provide any stunning privations concerning the US number but Chinese demand and India's crop size could tip the scales. Pick up in arrivals would lend credibility to those who believe their is room to increase the size of the Indian crop.

The wide gap between last year and this is closing quickly India seems to be heading towards record carry forward stock for the fiscal 2009-10. Cotton commercials there point to a combination of lower consumption and exports to explain an unprecedented carryover.

The competitiveness of US quotes seems to be able to keep export sales up which are encouraging. However, with only limited demand due to global economic conditions it is a matter of time that the market must deal with the overhang of supplies in India, China as well as loan forfeitures.

While market rallies will eventually be capped by selling from either or both India and China, but near term fundamental resistance for May cotton comes from resistance in relation to this week's 32.79 AWP.

Technically, the market has continued to trudge along in extreme oversold conditions for over two weeks. The low volume in both futures and options along with miniscule changes in open interest would seem to portend the specs are in no hurry to make a shot at new contract lows.

A close for May cotton above 4320 would bring hope of an impending bounce one above 4385 would convince many short term bears that a double bottom must be contended with. In that case, upside momentum should take May rather quickly to between 4485 and 4595. Should that occur, a close above 4485 would raise the objective to near.

Swiss Financial Services

Must ReadView All

Textiles | On 17th Jan 2017

GST rollout from July 1; states to control small taxpayers

The Centre and states have reached a consensus on the issue of dual...

Courtesy: Carnegie Fabrics

Textiles | On 17th Jan 2017

Calera Capital acquires majority stake in Carnegie Fabrics

Private equity firm Calera Capital has bought a majority stake in...

President Tsai Ing-wen delivering remarks before boarding her plane bound for Central America. Courtesy: Presdient's office

Textiles | On 16th Jan 2017

‘Textiles at centre of Taiwan’s new trade arrangements’

Textiles should be at the heart of Taiwan’s thinking while developing ...

Interviews View All

DK Sharma
Velocity Apparelz

We constantly communicate with employees at all levels

Vidhyaa Shankar. S
A Ganapathi Chettiar

'The usage of knits is getting into the boundaries of woven fabrics'

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Mohammad Hassan
Biax Fiberfilm

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

Marten Alkhagen
Swerea IVF AB

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

Iago Castro Asensio
RCfil Distribuciones S.L.

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

Robert Brunner
Devereux

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

Igor Chapurin
Chapurin

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

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

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 2017

January 2017

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

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search