New York cotton futures backed and filled all week in search of improved demand and a clearer definition of prospects for the 2007 crop. Trade hedging continued against loan stocks and kept the market under pressure. Yet, that same trade hedging has nearly run its course for now and presents a small opening for a potential mini price rally.
Nevertheless large world and U.S. carryover stocks, coupled with certificated stocks against the New York contract will keep a lid on prices. Too, while the market continues to act as if a bottom has been established-and it probably has-the necessary technical signals have not been exhibited to insure that the old crop July contract will not slip back to the 47-48 cent level again.
U.S. export sales continue to be slightly positive, but export shipments continue to be well less than desired. The export market is giving every appearance that much of the current sale activity is set for delivery in the 2007-08 marketing year-not for the current season. With remaining U.S. cotton being some of the cheapest in the world, international mills are locking in their purchases for distant, rather than near term delivery.
Export sales for the week ending May 24 were a net of 293,300 RB of upland and a net reduction of 21,800 RB of Pima as Turkey switched a 36,800 bale previous Pima sale to upland. However shipments totaled only 330,300 RB with upland accounting for 308,900 RB and Pima shipments of 21,400 RB. Thus, weekly shipments were nearly 100,000 bales less than the pace required to meet the USDA estimate of 13.25 million bales.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
