Global Apparel Market – An Overview | Watch NOW! | Ad
Home / Knowledge / News / Textiles / Cotton prices destined to move higher by Q2 or Q3
Cotton prices destined to move higher by Q2 or Q3
16
Jan '10
NY futures closed basically unchanged this week, with March inching up just 2 points to close at 72.91 cents.

The market made a valid attempt to generate new upside momentum on Monday by rallying all the way up to 74.49 cents, but there was simply no follow-through buying and values quickly retreated to their recent lows. To make matters worse for the bulls, today's close was slightly below the uptrend line dating back to August 27 on the daily chart, which may invite additional spec selling in the sessions ahead.

The latest USDA supply/demand report and today's export sales report were reminders that perception is often more powerful than reality. In both cases the expectations for more bullish numbers were not met and the market ended the respective sessions with sharp losses. However, in our opinion both of these reports were anything but bearish and should instead be seen as building blocks for a strong bullish case going forward.

The USDA report showed only minor changes overall, with world production basically being left unchanged at 102.71 million bales and world use down a minor 150'000 bales at 114.36 million. Of course the devil lies in the details and there was a 500'000 bales increase in the Chinese crop to 32.0 million bales that caught some traders by surprise.

However, while China, who is the world's largest importer, saw its crop estimate raised, the US and India, who are the world's two leading exporters, had their production numbers reduced by 200'000 and 300'000 bales, respectively. Since China seems to have no intention to slow its imports, the fact that the US and India have less to offer to the world should in our opinion be seen as bullish, not bearish.

Today's US export sales number also failed to live up to expectations after the 'whisper number' had sales at 500'000 bales or more. However, a marketing-year high of 440'700 running bales of Upland and Pima is certainly nothing to sneeze at. For the current season total commitments have now reached just under 7.0 million statistical bales, with almost 30 more weeks to go until the end of July.

After adjusting for the lower US crop estimate and taking last week's export sales into account, the US had only about 8.35 million bales left for sale as of January 7th. We can't stress enough how little cotton that is given that mills have hardly any forward coverage and with China having a voracious appetite for imports. It is still a very long 9 or 10 months until new crop will bring relief.

The latest on-call report shows that mills took advantage of last week's dip to fix a substantial amount of cotton. As of January 8, unfixed on-call sales dropped to 4.95 million bales after a net reduction of 332'400 bales during the week. Unfixed on-call sales in current crop March, May and July still amount to 3.54 million bales, which will provide decent support as this amount needs to be fixed within the next five months.


Must ReadView All

Trump announces tariffs on $200 bn worth Chinese imports

Apparel/Garments | On 18th Sep 2018

Trump announces tariffs on $200 bn worth Chinese imports

US President Donald Trump escalated the trade war with China on...

Courtesy: Sunrise Bumi Textiles

Textiles | On 18th Sep 2018

Sunrise Bumi developing new products for profitability

Sunrise Bumi Textiles, one of the world's leading quality yarn...

New Zealand bans sheep mulesing

Textiles | On 18th Sep 2018

New Zealand bans sheep mulesing

New Zealand has banned the practice of mulseing sheep, making the...

Interviews View All

Mandeep Nagi, Shades of India

Mandeep Nagi
Shades of India

Women value something that is unique and has a flavour of India

Smita Murarka, Amanté

Smita Murarka
Amanté

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

Kamlesh Vaghela, RK Textiles

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Sham Shah,

Sham Shah

Shamal and Shamal Pvt Ltd is into manufacturing and sales of textile...

Ashish M Amin,

Ashish M Amin

Premier Looms is a leading provider of cutting-edge machinery and...

Kamal Kulshreshth,

Kamal Kulshreshth

Colorjet is among the fastest-growing wide format digital inkjet print...

Davide Vigano, Sensoria

Davide Vigano
Sensoria

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

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb
Brrr°

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Paige Mullis, Glen Raven Inc

Paige Mullis
Glen Raven Inc

Paige Mullis discusses the expansion plans of Glen Raven Inc in India, and ...

Jay Ramrakhiani, Occasions Elegance Wear

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Tony Ward, Tony Ward

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Prathyusha Garimella, Prathyusha Garimella

Prathyusha Garimella
Prathyusha Garimella

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

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 2018

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

news category


Related Categories:

Advanced Search