Home / Knowledge / News / Textiles / Mixed reaction in NY cotton futures
Mixed reaction in NY cotton futures
15
May '09
NY futures closed mixed this week, with July adding 18 points to close at 59.06 cents, while December dropped 43 points to close at 61.07 cents.

After the market had rallied about 20 cents in just two months, racing from 40 to 60 cents without much of a pause, it finally encountered some resistance this week. Since making a high of 61.67 cents on Tuesday, the market has given back almost three cents and this time it doesn't look like buyers are rushing in as hastily as on previous dips.

Just when the trade with its 9.5 million bales net short position (CFTC report of May 5) seemed at risk of getting overrun by speculative buying, it was new spec shorts that came to the trade's rescue. The latest ICE spec/hedge report showed that outright spec shorts reversed course by adding 3'044 contracts last week, thereby counterbalancing the buying by outright spec longs, which added 5'532 lots. This was a notable change from previous weeks when the two camps were teaming up on the buy side, with spec longs establishing new positions and spec shorts covering existing ones.

Some commentators are mistaken in saying that profit-taking by spec longs led to this set-back, because open interest has been rising for 13 straight sessions, increasing by over 19'000 contracts to nearly 138'000 contracts as of this morning. This confirms that it was new shorts getting in rather than existing longs pulling out that led to this dip. The fact that stock and commodity markets were starting to pull back may have emboldened new shorts to take short-term positions in this technically overbought market.

That the rally was losing steam became evident on Tuesday, after a friendly USDA report failed to generate additional upside momentum and the market closed 145 points below the high of that day. Speaking of the USDA report, it showed a fairly constructive set of numbers for the 2009/10 marketing year, with world consumption expected at 111.0 million bales (adjusted for the ominous "loss" factor) and world production at 106.5 million bales.

If the USDA were correct with its prediction, it would finally lead to a sizeable drop in world ending stocks to just 57.8 million bales, after inventories were reported between 62.0 and 62.8 million bales for the last four seasons.

The recent sharp recovery in cotton prices has certainly been helped by the fact that governments in China, India and Central Asia were willing to take control of sizeable amounts of inventory and temporarily withdraw it from the marketplace. In China the USDA estimates that while total ending stocks are not much different from a year ago, 12.5 million bales have shifted to the state reserve since last fall.

India's government agencies too still have several million bales in inventory and they may continue their high support price policy next season, while Central Asian ending stocks will increase by about 1.4 million bales this season as governments are reluctant to let go of their crops below a certain price level.


Must ReadView All

Belarusian petrochem firms sign contracts with Russia

Textiles | On 22nd Oct 2018

Belarusian petrochem firms sign contracts with Russia

Belarus recently signed contracts worth nearly RUB 12 billion for...

Courtesy: Donear

Textiles | On 22nd Oct 2018

Aspiring middle class shaping menswear fabric trend

The key trends shaping menswear fabric include a new middle class and ...

Bangladesh saw closure of 1200 factories in 4 yrs: BGMEA

Apparel/Garments | On 22nd Oct 2018

Bangladesh saw closure of 1200 factories in 4 yrs: BGMEA

Nearly 1,200 garment factories in Bangladesh shut shop in the last...

Interviews View All

Cindy McNaull, Cordura

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Prabu Mohanram, Balavigna Weaving Mills Pvt Ltd

Prabu Mohanram
Balavigna Weaving Mills Pvt Ltd

The biggest challenge that the weaving industry faces is high price

Yash Maniyar, Rekha Maniyar

Yash Maniyar
Rekha Maniyar

Indian fashion market is growing at a staggering rate

Mala Alwani,

Mala Alwani

<div>Delhi-based fast fashion womenswear brand, Besiva, aims to bridge the ...

Urmil Arya,

Urmil Arya

Sushila International, a well established textile organisation established ...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries is into manufacturing of textile process house machines, ...

Dr. Rene Wollert, Freudenberg Nonwovens

Dr. Rene Wollert
Freudenberg Nonwovens

Dr. Rene Wollert discusses the current scenario of the global nonwovens...

Mark Brill, Birmingham City University (BCU)

Mark Brill
Birmingham City University (BCU)

<div>A technological breakthrough could see people getting messages about...

Davide Vigano, Sensoria

Davide Vigano
Sensoria

Sensoria is a leading developer of smart garments and IoMe (Internet of...

Wendell Rodricks, Wendell Rodricks

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Yash P. Kotak, Bombay Hemp Company

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

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


October 2018

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

news category


Related Categories:

Advanced Search