Home / Knowledge / News / Textiles / NY futures give up further ground this week
NY futures give up further ground this week
12
Dec '09
NY futures gave up further ground this week, with March slipping 52 points to close at 73.72 cents.

Even though this morning's USDA supply/demand report as well as the weekly US export sales report were bullish, the market was unable to generate any new upside momentum from it. What's missing at the moment is speculative buying, which has really been the main driver behind this bull market in commodities that had its origins back in March.

While fundamentals have certainly become more supportive in recent months, mills have still not adjusted to this higher price level and merchants seem to be waiting for a dip in prices before possibly getting out of some of their 14.2 million bales in net short futures. As a result we have a very thinly traded market at the moment, with futures (outside of spreading) and options volume being unusually low for this time of the season.

Earlier this week reliable sources in China reported that the government would soon release the TRQ import quota of 0.9 million tons plus an additional 1.0 million tons with sliding scale duties. Further, it is expected that the government will authorize another 1.0 million tons of imports by the second quarter of next year. In total we could see as many as 13.3 million bales in quotas issued this season, which combined with the cotton that China has already imported since August would probably surpass the current USDA estimate for Chinese imports by a wide margin.

The USDA raised Chinese imports by 0.5 million bales to 9.0 million bales in its latest report, but we believe that this is still much too conservative. We wouldn't be surprised to see China import 11 or 12 million bales by the end of this marketing year. The promise of impending quotas has served to calm down the local market and prices have eased around 3-4 cents over the last couple of weeks.

This drop in Chinese prices seems to send the wrong signal to the market, as it is seen as weakness, when in fact quite the opposite is the case. By bringing its market under control with the help of imports, China is simply passing on the problem to someone else. It's like playing musical chairs, with China now having a chair to sit on, while someone else will be left standing.

As the USDA numbers clearly show this is a demand-driven bull market, which is the most powerful kind. The biggest surprise in today's USDA report was the 1.0 million bales increase in world consumption to 114.5 million bales. Increases in China (0.5 mio), India (0.25 mio), Vietnam (0.10 mio) and Thailand (0.075 mio) reflect the economic strength that we have been seeing in the Asian economies.

Since global production was basically unchanged from last month, the seasonal production deficit grew to about 11.8 million bales and the foreign output gap increased to a record 21.0 million bales. Therefore, even if the US ships the 11.0 million bales the USDA currently estimates, there are still around 10.0 million needed and these bales will have to be taken from existing stocks. According to the USDA, global ending stocks are to drop by around 9.3 million bales from last season to just 51.8 million bales, the lowest level since 2003/04.


Must ReadView All

Courtesy: Fashion Revolution/Fashion Transparency Index

Fashion | On 23rd Apr 2018

Top global fashion brands now more transparent

Fashion Revolution’s Fashion Transparency Index 2018 reveals Adidas...

Japan’s clothing imports up 4% in fiscal 2017

Apparel/Garments | On 23rd Apr 2018

Japan’s clothing imports up 4% in fiscal 2017

Japan’s imports of clothing and accessories increased by 4 per cent...

PVH, WWF tie up to protect water bodies in Ethiopia, India

Apparel/Garments | On 23rd Apr 2018

PVH, WWF tie up to protect water bodies in Ethiopia, India

PVH Corp , parent company of brands like Tommy Hilfiger, Calvin...

Interviews View All

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Arvind Saraf
Triveni Sarees

e-Commerce is still evolving fast with constant flux and surprises

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Harsh Shah

Established in 1956 with a small beginning, Embee today manufactures a...

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...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Aditi Somani
Aditi Somani

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

Sidharth Sinha
Sidharth Sinha

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

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

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

Leave your Comments


April 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
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

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
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

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
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

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
7.8%
Skip
9.7%

Total Votes: 103


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