Home / Knowledge / News / Textiles / NY futures extend their rally this week
NY futures extend their rally this week
07
Aug '10
NY futures extended their rally this week, with December gaining another 315 points to close at 80.06 cents, while March advanced 289 points to close at 78.00 cents.

Last week we mentioned that the market would not be able to keep rallying on short covering alone and that it needed to see an increase in volume and open interest from new buying in order to generate upside momentum. It seems that hedge funds were listening, because they finally came back as strong buyers of cotton and commodities in general this week.

As of this morning open interest stood at 178'947 contracts, an increase of over 14'000 contracts from the week before, and today's breakout session has most likely added more bets to this number. Volume has improved as well, with more than 20'000 contracts changing hands on big up days, while tapering off on consolidation days, which is what we need to see in an uptrend.

From a technical point of view the bulls must have mixed feelings after performance. On the one hand December broke above its June 16 high of 79.90 cents and managed to close at the highest level since September 2008, which is constructive.

However, once buy stops and additional spec buying had propelled December up to 81.78 cents, the market ran into stiff resistance from trade selling and the close of 80.06 cents must therefore feel more like a rejection than a stamp of approval. October, which is the current lead month on the weekly continuation chart, didn't perform any better since it initially rallied more than a cent above the previous weekly high of 84.94 cents, only to sell off nearly two cents thereafter.

We need to point out though that October's open interest amounts to less than 1'000 contracts at the moment and it is therefore insignificant in the bigger picture, but it nevertheless has some relevance for technicians who look at the weekly chart.

US export sales continued at a relatively strong pace considering that prices had risen last week and merchants were reluctant to offer additional cotton for nearby shipment. For the week ending July 29, export sales amounted to 219'400 running bales of Upland and Pima, with China taking about 80'000 bales.

For the 2009/10 marketing year sales have now reached 14.1 million statistical bales, of which 12.2 million have so far been shipped. With two days still to be added to the final tally, exports will be very close to the USDA projection of 12.25 million bales. About 1.9 million bales will therefore get carried over into the 2010/11 marketing year and get added to the 3.8 million bales in existing commitments, bringing total outstanding sales to around 5.7 million bales.

We have repeatedly written about our suspicions in regards to Chinese ending stocks. This week the China Cotton Association reported that stocks in public warehouses (including stocks in Xinjiang) amounted to just 0.46 million tons at the end of July. To this number we need to add government reserve stocks of around 1.2 million tons, imported cotton in transit as well as consignments (maybe 0.2 million tons), plus whatever mills hold in inventory at their premises.

Must ReadView All

Textiles | On 29th Apr 2017

Textile sector may have uniform GST rate: Irani

The textile sector could have a uniform Goods and Services Tax (GST)...

Textiles | On 30th Apr 2017

Government revamping tech mission on cotton

Indian Government is working to revamp the technology mission on...

Apparel/Garments | On 30th Apr 2017

Columbia Sportswear records Q1 net sales of $543.8 mn

Columbia Sportswear Company has announced record net sales of $543.8...

Interviews View All

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Md Hanifur Rahman
Aman Group

The level of understanding the job role and organisational requirements...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Suresh Patel
Sidwin Fabric

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

Marcel Alberts
Eurofibers

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

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

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:
April 2017

April 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



X