Home / Knowledge / News / Textiles / Drop in worldwide prices of cotton continues

Drop in worldwide prices of cotton continues

27
Oct '08
After moving slightly more than ten cents above the AWP, cotton began last week with a record setting 602 point swing on Monday to the downside. Cotton prices then began to successfully distance themselves from outside markets in near schizophrenic fashion. On any given day stocks would be up and cotton down. The next day, stocks would be down and cotton up.

Even more confusing were the Dec/March differences. Generally speaking, as the market moves toward the delivery period, any changes in the differences between the spot month and the next often reflect changes in the fundamental situation. In this case, the December to March spread closed to the tightest level in the life of the contracts only to shoot skyward on Thursday. This sudden change in the difference between these months invoked a lot of talk but no answers.

Panic liquidation continued unabated in both equities and commodities. The CRB Index dropped to lows not seen in five years; the Baltic Dry Freight Index six years. Fridays break in the CRB Index was the 23rd such in the last 29 sessions. Crude oil settled at a 17-month lows despite OPEC's decision to cut output by 1.5 million barrels a day. On the other hand, the dollar index has gained during 19 of the last 24 sessions.

Cotton futures, which have lost ground 26 times in the last 38 sessions for a total of almost 24 cents, settled on contract low closes. Losses were not limited to the US as China's cotton prices continued to drop as well. So far the NDRC attempt to stabilize prices has had little effect.

The fundamental outlook took a sour turn last week when Cotlook reduced its estimate of global usage to 115.5 million bales, a reduction of 2.5 million bales from its month earlier estimate and a whopping 6.8 million bales below USDA's October estimate. They cut Chinese usage about 900,000 bales below their month lower estimates and are now about 5 million below USDA's view of Chinese needs.

Technically, the near term objective of 5400 was met a week ago. However, the bounce was only a two day phenom. Additionally, the buy signal generated a week ago by the 20 stochastics was negated Friday.

The markets indecisiveness is indicative of a period of consolidation. Right now it would appear that the best the bulls can probably expect is a consolidation of prices between 4550 and 5250. A new low close would portend at test of 4300. The 20-21 day moving averages are coming down quickly so a close above 5250 would portend another test of the upside.

Swiss Financial Services


Must ReadView All

Pic: Shutterstock

Textiles | On 25th Sep 2020

UK finance minister outlines Winter Economy Plan

UK chancellor of the exchequer Rishi Sunak yesterday outlined...

Pic: Shutterstock

Textiles | On 25th Sep 2020

India in process of finalising Mauritius FTA: minister

India is in the process of finalising the proposed free trade...

Pic: Shutterstock

Textiles | On 25th Sep 2020

Indonesia expects economy to shrink by 1.7-0.6% this year

Indonesia recently revised down its 2020 gross domestic product...

Interviews View All

Top executives, Textile industry

Top executives
Textile industry

It will take some time for the people to change their buying choices

Varinder Singh Jawanda, Trendy Bharat

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Mohammad Mamun Ar Rashid, UL VS Bangladesh Ltd

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Anupam Arya,

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Deepprakash Agrawal,

Deepprakash Agrawal

Radhey Weaves is a Surat-based manufacturer of brocade fabrics. MD...

P V Kadole,

P V Kadole

Nine co-operative organisations from Ichalkaranji came together to form an ...

Jacques Prigneaux, EDANA

Jacques Prigneaux
EDANA

EDANA has been the leading global association and voice of the nonwovens...

Tiasha Renganathan, Twinery Innovations by MAS

Tiasha Renganathan
Twinery Innovations by MAS

Twinery-Innovations by MAS is the innovation arm of Sri Lankan company MAS ...

Frank Heislitz, Freudenberg

Frank Heislitz
Freudenberg

Freudenberg Performance Materials is a leading global manufacturer of...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Prathyusha Garimella, Prathyusha Garimella

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Bani Batra,

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

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


September 2020

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


Advanced Search