NY futures continued to fall hard, with July dropping another 160 points to close at 48.40 cents and December slipping 172 points to close at 53.05 cents.
The AWP continued to trend lower as well, as the two US quotes weighed heavily on the A-index. This morning, the A-index stood at 56.35 cents, down 185 points from last week, while the AWP for the coming week will be set at 40.30, down 160 points from the current value.
Although no forward index has formally been announced yet, the five forward quotes that are posted at the moment would translate into a 60.90 cents index, or 455 points more than the present value. This implies a rising AWP over the next two months and this jump in the loan redemption value could get exacerbated if the futures market were to rebound during this blending period.
As we have stated previously, there is really no fundamental reason for the market to go lower, other than this pre-emptive hedging against impending redemptions. US cotton has been the cheapest value in the world for some time now and mills are quite happy with these bargain prices.
The latest export sales report confirmed this once again, since for the week ending April 26 a total of 484'800 running bales of Upland and Pima were sold to over 25 different markets.
Shipments continued to lag a bit at 346'600 running bales, but this will change once the AWP blending process forces more cotton into the marketplace. For the season, total commitments now amount to 12.3 mio statistical bales, with 7.6 mio of those already shipped.