Home / Knowledge / News / Textiles / Mixed reaction in NY cotton futures
Mixed reaction in NY cotton futures
15
May '09
NY futures closed mixed this week, with July adding 18 points to close at 59.06 cents, while December dropped 43 points to close at 61.07 cents.

After the market had rallied about 20 cents in just two months, racing from 40 to 60 cents without much of a pause, it finally encountered some resistance this week. Since making a high of 61.67 cents on Tuesday, the market has given back almost three cents and this time it doesn't look like buyers are rushing in as hastily as on previous dips.

Just when the trade with its 9.5 million bales net short position (CFTC report of May 5) seemed at risk of getting overrun by speculative buying, it was new spec shorts that came to the trade's rescue. The latest ICE spec/hedge report showed that outright spec shorts reversed course by adding 3'044 contracts last week, thereby counterbalancing the buying by outright spec longs, which added 5'532 lots. This was a notable change from previous weeks when the two camps were teaming up on the buy side, with spec longs establishing new positions and spec shorts covering existing ones.

Some commentators are mistaken in saying that profit-taking by spec longs led to this set-back, because open interest has been rising for 13 straight sessions, increasing by over 19'000 contracts to nearly 138'000 contracts as of this morning. This confirms that it was new shorts getting in rather than existing longs pulling out that led to this dip. The fact that stock and commodity markets were starting to pull back may have emboldened new shorts to take short-term positions in this technically overbought market.

That the rally was losing steam became evident on Tuesday, after a friendly USDA report failed to generate additional upside momentum and the market closed 145 points below the high of that day. Speaking of the USDA report, it showed a fairly constructive set of numbers for the 2009/10 marketing year, with world consumption expected at 111.0 million bales (adjusted for the ominous "loss" factor) and world production at 106.5 million bales.

If the USDA were correct with its prediction, it would finally lead to a sizeable drop in world ending stocks to just 57.8 million bales, after inventories were reported between 62.0 and 62.8 million bales for the last four seasons.

The recent sharp recovery in cotton prices has certainly been helped by the fact that governments in China, India and Central Asia were willing to take control of sizeable amounts of inventory and temporarily withdraw it from the marketplace. In China the USDA estimates that while total ending stocks are not much different from a year ago, 12.5 million bales have shifted to the state reserve since last fall.

India's government agencies too still have several million bales in inventory and they may continue their high support price policy next season, while Central Asian ending stocks will increase by about 1.4 million bales this season as governments are reluctant to let go of their crops below a certain price level.


Must ReadView All

Pakistan govt notifies 50% duty drawback on exports

Textiles | On 21st Oct 2017

Pakistan govt notifies 50% duty drawback on exports

The Pakistan government has notified the ‘Duty Drawback of Taxes...

Ghana sets up task force to clamp down on textile piracy

Textiles | On 21st Oct 2017

Ghana sets up task force to clamp down on textile piracy

Ghana’s ministry of trade and industry has set up a taskforce to...

Courtesy: Coach

Fashion | On 21st Oct 2017

US company Coach to change name to Tapestry from Oct 31

Coach Inc., a New York-based house of modern luxury accessories and...

Interviews View All

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Ravindra Jain, Ashish Baid

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

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Abhishek Pachauri

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

Marten Alkhagen
Swerea IVF AB

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

Steve Cole
Xerium Technologies

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

Mohammad Hassan
Biax Fiberfilm

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

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...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch 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

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
77.1%
No
12.9%
Skip
10.0%

Total Votes: 70

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
61.4%
No
28.6%
Skip
10.0%

Total Votes: 70

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
85.7%
No
10.0%
Skip
4.3%

Total Votes: 70

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
75.7%
No
11.4%
Skip
12.9%

Total Votes: 70


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