Home / Knowledge / News / Textiles / New York cotton futures rebound slightly

New York cotton futures rebound slightly

18
Feb '12
Plexus Cotton Limited reports that NY futures rebounded slightly this week, as March advanced 207 points to close at 92.45 cents, while December gained just 84 points to close at 93.72 cents.

For the past five months, since September 22nd, the March contract has been moving in a relatively narrow trading range of just 1850 points, marked by a high of 102.85 cents and a low of 84.35 cents. New crop December was confined to an even tighter range of just 1474 points, meandering between a high of 97.99 cents and a low of 83.25 cents.

We believe that the market is currently stuck between a set of opposing forces, which keep it from generating any momentum on either side. Acting in support of the market are the restocking purchases by the Chinese Reserve, the relatively strong demand for nearby shipment as mills around the globe are operating with minimal stocks, the comparatively high price of corn and soybean, and the continued debasement of fiat currencies, which has accelerated since December.

On the other side we have an increasingly bearish supply/demand balance sheet that could see global ending stocks rise to their highest level ever, as world cotton production is projected to surpass mill use for a third consecutive season. After a surplus of 1.8 million bales in 2010/11 and a 13.6 million bales surplus in the current season, we are potentially looking to add another 5 or 6 million bales to world ending stocks next season.

Fortunately China has so far been willing and able to lift the extra supply off the world's shoulders, by absorbing an estimated 16-17 million bales of domestic and imported cotton into its strategic reserve. This has been countervailing the bearish impact these surplus bales would otherwise have had on world prices. However, since it is believed that the capacity of the Reserve is in the neighborhood of 18 to 19 million bales, the world cannot continue to rely on China to mitigate an oversupply situation indefinitely.

Since the Chinese government is likely to continue its support program next season, it is possible that some of these Reserve stocks will be sold to domestic mills in the second and third quarter in order to make room for new auction purchases next season. This in turn would reduce import needs during the summer months. China has been a very active importer so far this season, as already 10.1 million bales (2.2 million tons) have arrived on its shores in the first six months of the season (August to January), but this pace will likely slow down during the second half of the season. If Reserve stocks do indeed get released, we probably won't see any additional import quotas beyond the ones already authorized.

US export sales were quite strong last week, as net new sales for the current marketing year totaled 108'000 running bales, not counting net new 'optional origin' sales of 54'000 running bales. New sales for the 2012/13-season amounted to 65'200 running bales.


Must ReadView All

US President Joe Biden. Pic: Shutterstock

Textiles | On 29th Jul 2021

Proposed amendments to raise US content in federal purchases announced

The United States has decided to raise US-made content in government...

Pic: Shutterstock

Retail | On 29th Jul 2021

UK department store Selfridges put up for sale for £4 bn

Canada's Weston family that owns Selfridges has put up the UK...

Pic: Shutterstock

E-commerce | On 29th Jul 2021

Chinese firm Mogu to acquire 59.62% equity interest in Hangzhou Ruisha

Chinese online fashion and lifestyle destination Mogu has announced...

Interviews View All

Vandana Narang, National Institute of Fashion Technology

Vandana Narang
National Institute of Fashion Technology

Campus placements are low due to lockdowns

Textile Industry, Head honchos

Textile Industry
Head honchos

Ensured payment of fee was least concern for students

Florian Heubrandner, Lenzing AG

Florian Heubrandner
Lenzing AG

Cannot see the world breaking away from cotton & polyester

Chendhuran Sundar,

Chendhuran Sundar

It manufactures and retails menswear garments in India under the brand...

Erwin Devloo,

Erwin Devloo

The Picanol Group is a diversified industrial group active worldwide in...

Akram Tariq Khan,

Akram Tariq Khan

E-commerce brand YourLibaas meaning "garment or attire" in Udru, was...

Giulio Cesareo, Directa Plus

Giulio Cesareo
Directa Plus

UK-based Directa Plus is one of the largest producers and suppliers...

Kevin Young & Tom Lucas, Web Industries

Kevin Young & Tom Lucas
Web Industries

Web Industries is a precision formatter of nonwoven materials used in baby ...

Wolfgang Plasser, Lenzing AG

Wolfgang Plasser
Lenzing AG

The Lenzing Group is an international company headquartered in Austria...

Ramya Rao & Kavea R Chavali, Kalaneca

Ramya Rao & Kavea R Chavali
Kalaneca

<div>The journey of Kalaneca (kala-Art, Neca- Nikaah) formally began in...

Aprajita Toor, Aprajita Toor

Aprajita Toor
Aprajita Toor

The creations by Aprajita Toor were born out of a deep desire to create...

Anjali Bhaskar, Samatvam

Anjali Bhaskar
Samatvam

Anjali Bhaskar has an experience of 12 years in the fashion industry. She...

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


July 2021

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


Advanced Search