Home / Knowledge / News / Textiles / NY cotton futures ends volatile week slightly lower
NY cotton futures ends volatile week slightly lower
01
Feb '14
An escalating emerging markets crisis introduced an additional uncertainty factor to an already complex cotton situation this week, resulting in erratic up and down price action as traders tried to figure out the market’s next move. Bulls and bears both have some strong arguments at the moment and it will be interesting to see who will emerge as the stronger side in this tug of war. 
 
The bullish case is mainly built on a tight statistical situation in current crop and a relatively large trade net short position (10.4 million as of last week) that may get squeezed, similar to what we saw happening a year ago. Although Chinese imports have slowed down this season compared to the previous two, they nonetheless seem strong enough to once again absorb the entire ROW production surplus and possibly more, which means that ROW inventories are likely to remain rather tight as we head into the second half of the season.
 
After another two weeks of stellar US export sales, during which over 1.0 million running bales were sold, most of which ‘on-call’, our calculations show that unsold US supplies (including beginning stocks) are probably at no more than 4.4 million statistical bales. Since many mills are not well covered for the second and third quarter and with only a limited amount of machine picked cotton available from other origins, it makes perfect sense for the US to price itself out of the market in order to ration remaining supplies. 
 
This has already happened to a certain degree, at least when looked at from a fixed price point of view, but mills have been trying to outsmart the market by buying on-call, which has the potential to backfire as history has shown. Unfixed on-call sales increased by another 0.4 million bales last week and they now amount to 6.35 million bales overall, of which 5.67 million bales are in current crop. While outstanding fixations dropped by 83’100 bales in March, they increased by 376’400 bales in May and July, as buyers continued to postpone pricing decisions.
 
Interestingly, even the emerging markets crisis has a bullish component to it, as growers tend to hold on to their crops to protect themselves against a drop in local currency, which limits ready available supplies and can trigger short-covering rallies.


Interviews View All

Top executives, Textile industry

Top executives
Textile industry

Defining MSMEs on the basis of turnover makes it simpler to do business

Milind Khandwe, Hindoostan Innovation Centre

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Ajay Ghariwala, Luthra Group

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Franco Ravazzi,

Franco Ravazzi

Italy-based Tessimenti E Orditi Tinti (T.O.T SRL) specialises in stocking...

Tina Antoniades,

Tina Antoniades

India-headquartered Lulu & Sky is a rapidly escalating brand with the...

Tejas N Patel, Navin D Patel,

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Karl Zelik, Vanderbilt University

Karl Zelik
Vanderbilt University

A team of engineers at the Vanderbilt University has designed a smart...

Andreas Lukas, Andritz Nonwoven

Andreas Lukas
Andritz Nonwoven

With forces in engineering and process development, Andritz Nonwoven...

Matthew Kolmes, Supreme Corporation

Matthew Kolmes
Supreme Corporation

Supreme Corporation manufactures innovative specialty yarns and safety...

Karan Arora, Karan Arora

Karan Arora
Karan Arora

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

Sidharth Sinha, Sidharth Sinha

Sidharth Sinha
Sidharth Sinha

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

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

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


November 2019

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

Follow us on instagram

Follow

Follow Fibre2Fashion On


Advanced Search