News Flash

Reinhart Cotton Market Report

19 Jul '06

4 min read

NYK - continues to be range bound. The market recovered nicely early in the week, which recaptured the losses of the last week. However, New York suffered on Thursday and Friday and gave up almost all of its weekly gains to settle near the previous Friday's close.

USDA's report had no surprises, with the changes viewed as neutral; long-term views seem to be bullish as everyone continues to point at the supply deficit, which could grow with a deteriorating U.S. crop.

Other news weighing on the market was new record high crude oil prices and their impact on consumer attitudes/spending. There were also many reports from China on import quotas, but no news of the amount or when and how they will be released.

NYK Futures - Oct06 at 50.37, up 32 pts. (high 52.15/low 50.00), Dec06 at 52.16, up 28 pts. (54.05/51.88). Speculators were net long 4.3 percent last Friday, versus 7.0 percent previously.

The Cotlook 2005/06 A (FE) Index at 55.00 gained 80 pts. and the 2006/07 A (FE) Index at 57.40 lost 60 pts. this week. U.S. Export Report - Net 2005/06 sales at 74,000 was fair with little over three weeks remaining in the marketing year and total commitments at 17.8 million running bales; however, registrations for 2006/07 were dismal at 10,400. Shipments totaled 372,500 bales, which was not bad for a holiday-shortened week.

U.S. 2006/07 Crop - The percentage of the good/excellent stabilized this week at 41 percent, same as last week and lower than last year's 58 percent. Squaring across the belt (72 percent) and boll setting (27 percent) are both tracking at their five-year average. Rising temperatures are drawing further concern to the drought stricken areas.

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