Traders expectations indicate positive market into harvest 2007
03 Mar '07
3 min read
Nevertheless, the New York December contract will likely move into he the low to mid 60's as export sales increase in the summer and fall months of 2007. While the decline in carryover is somewhat small, 3.5 million bales, early season production problems would be expected to accentuate the move to higher prices. The drag on New York is the slow export demand for U.S. cotton that the market has faced all season.
Export sales of upland cotton for the week ending February 22 were only a net of 140,300 bales, the second lowest of 2007.
With only 22 weeks remaining in the marketing year the probability of meeting the USDA export projection is dwindling. Globecot noted this week that for the U.S. to export 15.0 million bales, weekly shipments for the remainder of the 2006/07 season will have to reach 444,113 480-pound bales. That is not going to happen (likely).
For 12 million bales to be exported, the weekly shipment average must be 330,476 bales. Weekly shipments the first 30 weeks of the season averaged only 137,651 bales. Yet, it is noted that in the final 22 weeks of the prior season, U.S. weekly shipments did average 437,647 480-pound bales of upland cotton.
The market will claw it way into the planting season fighting to climb above 55 cents. Yet, with March now upon us, we should expect China to begin opening import quotas. The market has spent months building a very strong base at 52 cents, thus the struggle for higher prices will be successful.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
