Home / Knowledge / News / Textiles / NY cotton futures shows mixed performance this week
NY cotton futures shows mixed performance this week
23
Nov '13
The Dec/March spread remained at the center of attention, with the difference widening dramatically to nearly 400 points today, after the two months had traded at par just a little over a week ago. We believe that December has now become very attractive to potential takers, be it as an outright purchase at 75 cents or on a spread at full carry. 
 
Considering the stiff basis some prominent merchants have been willing to pay for cash cotton this week, we have to assume that a large portion of the current Certified Stock (264’000 bales including bales under review) is going to disappear over the coming weeks. 
 
 There was a flurry of excitement on Wednesday after the market shot up 200 points based on two news items out of China, with March trading as high as 79.45 cents. First it was reported that China’s CNCRC expected the crop to be at just 6.68 million tons or 30.7 million statistical bales, quite a bit lower than the current USDA estimate of 32.5 million bales. 
 
The second story referred to rumors about the Reserve delaying auction sales by several weeks. This caught some local traders with short positions by surprise and led to a sharp rally in the Zhengzhou futures market, which spilled over to the NY futures market during the overnight session.
 
ZCE futures are currently in a steep inversion, with the January contract trading about 8 cents/lb above the May contract. Prices on the CNCE are showing a similar inversion. However, we need to remember that this is an artificial squeeze since China has more than enough cotton with its massive stockpile and in this context it is insignificant that China’s crop may be slightly lower than expected this season. 
 
 What we are currently seeing in many markets around the globe is a nearby shortage of cash cotton, as we are still in the process of refilling a nearly empty supply pipeline. Some traders may have overcommitted for nearby shipments and are finding it difficult to find coverage. 
 
The US is no exception, as merchants have been scrambling to get their hands on cotton, since the crop has been later than usual and logistics are only able to handle so much, with load out dates at warehouses already backed up until January in many cases. Meanwhile, US export commitments keep rising at a torrid pace, as around 1.8 million bales have been sold over the last six weeks! 
 
US export sales for the week ending November 14 amounted to a stellar 331’300 running bales net, with Turkey (117’600 bales) and China (68’100 bales) leading a group of 22 different markets. 
 
 


Must ReadView All

Pic: Shutterstock

Textiles | On 22nd Oct 2021

China's coal output rises to meet energy shortfalls amid govt measures

China's coal supply has showed signs of picking up with daily...

Pic: Shutterstock

Textiles | On 22nd Oct 2021

Indonesia, China begin feasibility study on coal-to-methanol unit

Indonesia and China recently signed an MoU to conduct a feasibility...

Pic: Shutterstock/TY Lim

Fashion | On 22nd Oct 2021

Balenciaga ranked hottest brand in The Lyst Index Q3 2021

Paris-based luxury fashion house Balenciaga was ranked the hottest...

Interviews View All

Gaurav Davda, Jindal Worldwide Ltd

Gaurav Davda
Jindal Worldwide Ltd

Indian MMF sector to become globally competitive

Textile Industry, Head honchos

Textile Industry
Head honchos

Quality & affordability to affect market acceptability of new fibres

Footwear Industry, Footwear Retailers

Footwear Industry
Footwear Retailers

Still struggling to mop up higher sales

Ujjval Saraf,

Ujjval Saraf

Founded by Jimmy Lai, Giordano International Ltd, a Hong Kong based...

Bharat Ahuja,

Bharat Ahuja

A mono store brand, <b>Bharat Ahuja's</b> Desire Design Studio has emerged ...

Abdullah Mohammad Saad Hossain,

Abdullah Mohammad Saad Hossain

Saad Group is a leading vertically integrated textile group in Bangladesh. ...

Sachin Pendharkar, Dieffenbacher India Pvt Ltd

Sachin Pendharkar
Dieffenbacher India Pvt Ltd

Germany-based Dieffenbacher Group is a producer of high-quality composites ...

Seth Casden, Hologenix

Seth Casden
Hologenix

Hologenix is a material sciences company dedicated to developing products...

Madison Maxey, Loomia

Madison Maxey
Loomia

Loomia designs and manufactures soft circuit systems that can be produced...

Raghavendra Rathore, Label Raghavendra Rathore Jodhpur

Raghavendra Rathore
Label Raghavendra Rathore Jodhpur

Being one of the first designers to use the "Brand India" positioning for...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

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


October 2021

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


Advanced Search