Home / Knowledge / News / Textiles / Output of G-8 meeting disappoints traders apparently
Output of G-8 meeting disappoints traders apparently
10
Jul '09
NY futures closed basically unchanged this week, as December advanced just 21 points to close at 61.13 cents.

Before today's turnaround the cotton market had been on the defensive, pressured by negative outside markets and a US dollar that tried to show some strength. Crude Oil futures declined 10 dollars a barrel in a little over a week and the stock market has started to soften again as well.

Even though the cotton market had three losing sessions early in the week, they occurred in relatively small volume and on each occasion the close was well off the daily low, which indicated that there was decent support waiting underneath. Nevertheless, today's rally came as a bit of a surprise, much like the strong performance last week. What's encouraging for the bulls is that it again happened in increasing volume and that today's gains eclipsed the accumulated losses of the previous three sessions.

The question as to what or rather who is behind this strength is still a bit of an enigma. Last week's rumors that index funds were committing new money to our market proved to be true according to the latest CFTC report. As of June 30, index funds had increased their net position by 5'397 contracts to 67'004 contracts. This was the biggest weekly increase since February 2008, when index funds' net long position amounted to roughly twice the current size.

It is somewhat surprising to see new index fund money coming in at a time when the CFTC is holding hearings on how to regulate such investments. One theory is that additional positions are being placed ahead of new restrictions in the hope that they would be 'grandfathered in'.

Traditional speculators continued to be light net buyers last week, while the trade took the other side of index and hedge funds and increased its net short position after several weeks of reducing it. This seems to be an indication that the trade does not believe in these high futures prices.

Today's rally was probably caused by a combination of factors, such as the rebound in outside markets, renewed pressure on the US dollar, strong export shipments and an improving technical picture.

US exports of 337'100 running bales last week lifted total shipments for the season to 12.25 million bales as of July 2nd and with four weeks to go it is almost a foregone conclusion that exports will surpass the current USDA estimate of 12.7 million bales by some 400'000 - 500'000 bales.

Tomorrow the USDA will release its latest supply/demand estimate and it is widely believed that the US numbers will present a slightly bullish scenario, while world numbers are not expected to reflect big changes. When we look at the US balance sheet, we started the season with a 22.85 million bales of supply, of which 3.55 million are taken by domestic mills and 12.25 million bales have so far been exported.

That leaves just 7.05 million bales in inventory, of which 3.0 million are already committed for export and probably around 0.9 million have been booked by domestic mills for Aug/Oct delivery. This means that just a little over 3 million bales of current crop remain available for sale at this point. Considering that China is about to release another import quota of about 1.8 million bales and that traditional export markets still need supplies for summer shipment, it is quite possible that the US will be nearly sold out by October.


Must ReadView All

Courtesy: Jens Mahnke from Pexels

Textiles | On 22nd Oct 2018

India levies anti-dumping duty on flax yarn from China

The ministry of finance, Government of India, has imposed definitive...

US polyester yarn makers allege dumping from China, India

Textiles | On 22nd Oct 2018

US polyester yarn makers allege dumping from China, India

Two major US synthetic yarn producers—Unifi Manufacturing, Inc...

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 ...

Interviews View All

Smita Murarka, Amanté

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Top executives, Textile industry, India

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Karan Toshniwal, Orange O Tec

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Manuele Baggini,

Manuele Baggini

Comec Italia Srl is a world leader in the production of printing machines. ...

Liz Manning,

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Harsh Shah,

Harsh Shah

Fynd is the central online shopping destination for fashion, offering...

Johan Berlin, InvestKonsult Sweden AB

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Robin Grankvist, OrganoClick AB

Robin Grankvist
OrganoClick AB

Robin Grankvist talks about PFCs, additives and various chemicals used in...

Dr. Rene Wollert, Freudenberg Nonwovens

Dr. Rene Wollert
Freudenberg Nonwovens

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

Robert Brunner, Devereux

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Divvya and Nidhhi Gambhir, Walnut

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Sandeep and Sarah Shaikh Gonsalves, SS Homme

Sandeep and Sarah Shaikh Gonsalves
SS Homme

SS Homme celebrates the craft of traditional tailoring through the bespoke ...

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