Home / Knowledge / News / Textiles / Yarn market improves markedly
Yarn market improves markedly
27
Mar '10
NY futures retreated this week, with May dropping 206 points to close at 80.18 cents, while December was down just 18 points to close at 74.98 cents.

The May contract, which is the most actively traded and therefore most relevant in terms of speculative activity, was unable to generate the necessary momentum to rally past the March 1st high close of 83.29 cents earlier this week and has since come under pressure. It was of no help that July was able to post a new high close of 83.68 cents on Tuesday. The fact that trading volume dropped below 10'000 contracts on Monday and Tuesday was an indication that this latest advance had run out of steam and that the market was ready for another correction.

Wednesday's breach of an uptrend line dating back to February 5th triggered a series of sell-stops by spec longs. After open interest had risen to nearly 190'000 contracts during the recent rally, we finally saw it drop by 1'643 contracts yesterday as a result of this spec long liquidation and it has probably decreased further. This rejection near the recent highs has started to form a double top on the chart and we should therefore expect a retest of the 78.70 cents support level in the near future.
Although current crop fundamentals remain supportive and the trade still needs to cover a substantial amount of shorts over the next three months, the near-term fate of the market is once again in the hands of speculators. We have seen rather wild swings in the net speculative position over the last three months that have produced some volatile price moves. On January 4th the net spec long position was around 6.5 million bales, with the spot month trading at 76.00 cents. What followed was an exodus of speculators that brought the net long position down to just 1.8 million bales and caused the market to drop nearly 10 cents to a low of 66.55 on February 5th. Then specs started to jump back in, rebuilding their net long to 6.0 million bales in the process, with the market rallying all the way into the low 80's. Now we are once again faced with the possibility of spec long liquidation, which could lead to another exacerbated move to the downside.

However, there are several differences compared to three months ago. For starters the US has sold 3.5 million bales for export since the beginning of the year and the statistical situation has tightened considerably, not only in the US but all over the globe. The cash market is clearly reflecting this tightness and the A-index is 745 points higher than on January 4th. The yarn market has improved markedly and mills are generally in decent shape even at this high price level. Also, the global economic outlook is more promising than three months ago and inflation is starting to show up on the radar screen.

Therefore, while the chart may prompt some long liquidation, we don't think that it will be as widespread as in January. We further believe that the trade will be a more aggressive buyer on weakness, because as of last week it was still sitting on a 13.2 million bales net short position and outstanding fixations in current crop remain exceptionally high at over 3.7 million bales (7.0 million overall). Sooner or later the trade will have to address this massive net short and unfixed on-call position, because rolling it forward won't be a viable option unless the inversion between current and new crop were to collapse.


Must ReadView All

Uzbekistan wants joint ventures with Hungarian textile firms

Textiles | On 20th Feb 2018

Uzbekistan wants joint ventures with Hungarian textile firms

Uzbekistan has offered Hungary to create joint ventures in the two...

Vietnam’s textile & garment exports up 10.68% in 2017

Textiles | On 20th Feb 2018

Vietnam’s textile & garment exports up 10.68% in 2017

Vietnam came very close to achieving its 2017 textile and garment...

Courtesy: Urban Outfitters

Apparel/Garments | On 20th Feb 2018

Urban Outfitters Q4 FY18 sales climb 5.7%

The net sales of Urban Outfitters, Inc., a leading lifestyle products ...

Interviews View All

C. Dhandayuthapani
Mag Solvics Pvt. Ltd

ITME 2016 exploited our full strength like never before

Sunil Rathore
Lacoste India

‘New vendor is welcome if he offers cost, quality and timely delivery’

Smita Murarka
Amanté

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

Urmil Arya

Sushila International, a well established textile organisation established ...

John Kelley

Textile Events is one of the largest textile fair in the United Kingdom,...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mark Paterson
Technical Absorbents Ltd

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

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Aditi Somani
Aditi Somani

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

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

February 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
70.6%
No
12.7%
Skip
16.7%

Total Votes: 102

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
63.7%
No
29.4%
Skip
6.9%

Total Votes: 102

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
88.2%
No
8.8%
Skip
2.9%

Total Votes: 102

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
83.3%
No
7.8%
Skip
8.8%

Total Votes: 102


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