Since around 2.5 mio bales are still in the loan and probably do not have any hedges against them yet, we have some 5.3 mio bales of unsold cotton outside the loan that shippers may want to have hedged.
2) On-call sales/purchases: As of May 25th, there were still around 4.6 mio bales of unfixed on-call sales on the books of shippers, which may have a short futures hedge against them. Likewise, there were around 1.4 mio bales of on-call purchases still open, against which merchants may hold a futures long. So for the purpose of this exercise we shall use the net on-call position of 3.2 mio bales.
3) Physical long positions in foreign growths: Shippers still hold physical long positions in several other origins, such as West Africa, Central Asia, Brazil and Australia, against which they have possibly sold futures to safeguard against a price decline. It is quite difficult to come up with an exact figure of how much unsold foreign cotton is still in merchant hands, which also includes positions of the next two crop-years (Brazil). But we feel that this number may be in the neighborhood of some 4 - 5 mio bales.