U.S. producers will plant 13 million acres in 2020
U.S. cotton producers intend to plant 13 million cotton acres this spring, down 5.5% from 2019 (based on the U.S. Department of Agriculture’s February 2020 estimate), according to the National Cotton Council’s 39th Annual Early Season Planting Intentions Survey.
ICE COTTON FINISHES NEAR UNCHANGED ON WEEK ON BULLISH EXPORT AND BEARISH WASDE REPORTS; NCC PROJECTS LOWER PLANTED AREA VS 2019
ICE cotton contracts finished mixed for the week ending Valentine’s Day with Mar giving up 34 points and May and Dec picking up 27 and 20 points, respectively. The Mar – May spread was near unchanged (at less than full carry) at (88).
Virus Remains The Main Influence, Bullish News Aside February 14, 2020
Cotton prices came under pressure after old crop futures traded up to 70 cents at midweek. Despite exceptional export sales and shipments, world concerns of China’s inability to control the coronavirus pressured the market the remainder of the week
Not much has changed from what we stated last week. We still feel that the trade is currently in charge of the market and that over the coming four months it will be a net buyer of March, May and July futures, as open on-call business gets fixed and merchants sell remaining basis-long positions. New net shorts will only be added in new crop as growers are starting to protect their upcoming crop.
Cotton Inc. Executive Cotton Update - February 2020
Executive Cotton Update - February 2020
Macroeconomic Overview: The Bureau of Economic Analysis estimates that the U.S. economy grew 2.3% in 2019. Forecasts suggest that growth could slow a little in 2020, with many projections falling between 1.9% and 2.1%. For comparison, in 2018, growth was 2.9% and in 2017 growth was 2.4%.
COTTON: The U.S. cotton estimates for 2019/20 are unchanged, except for a 1 cent-perpound reduction in the season-average upland farm price, to 62 cents, 8.3 cents lower than in 2018/19.
ICE COTTON FINISHES NEAR UNCHANGED ON WEEK AS COMPETING FACTORS SUPPORT/CAP MARKET
February 08, 2020
The ICE Mar contract held its own for the week, picking up 25 points to finish at 67.75. The Mar – May spread strengthened noticeably at (39), which is well below full carry. The Dec contract gained 13 points, settling at 68.86. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to higher Vs the previous Friday’s finish, which proved to be correct.
• Open Interest Falls for First Time in Eight Weeks • Coronavirus Impact on Chinese Economy and Cotton Market Continues • End of Impeachment Trial Positively Affects Market • WASDE Report Release Tuesday, February 11
There is good support in the cash market, but the technical picture has suffered some damage. However, speculators seem to give the market the benefit of the doubt and as long as the 200-day moving average holds, they may stay on the sidelines.
AN UGLY WEEK FOR THE COTTON MARKET, WILL IT CONTINUE?
02-February-2020
It was an ugly week for the cotton market, with the ICE Mar contract giving up 190 points, settling at 67.50. Still, the Mar – May spread was near unchanged (and at less than full carry) at (81). The Dec contract lost 181 points to settle at 68.73. The Mar contract was set back 155 points for the month of January.
Market Movement from 27th Jan 2020 to 01st Feb 2020
• On Monday NY futures opened sharply down by 125 points and recovered all the loss during the day and closed with 11 points gain. This week finally finished with 155 points loss W/W.
• Open Interest Increases • Weekly Export Sales Reach a Marketing Year High • A Tough Week for Global Markets • Traders Worry About Damage to China’s Economy
The cotton market is heavily infected with the coronavirus and suffered all week, with the nearby March falling below 68 cents. The near 400-point drop in price since word of the Chinese outbreak is showing signs that more losses are in store for the market.
As outlined above, speculators are currently on the sidelines, which leaves the trade in charge. Mills will fix on dips and buy additional supplies from merchants, which is going to reduce the amount of current crop shorts needed.
Last winter and spring, cotton futures prices were above 75 cents for most of that time and nearer 80 cents. Some growers took advantage and priced a portion of expected 2019 production. Some growers did not and, hindsight being 20/20, there’s not a grower out there who now doesn’t wish he/she had done more.
ICE COTTON POSTS TRIPLE DIGIT LOSSES FOR WEEK, INDEX FUND ROLLING LOOMS
26-January-2020
The Mar contract gave up 185 points over the holiday-shortened week in volatile and high-volume trading action, finishing at 69.40. Still, the Mar – May spread strengthened to (80). The Dec contract lost 180 points to settle at 70.54. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to lower Vs the previous Friday’s finish, which proved correct.
Market Movement from 20th Jan 2020 to 25th Jan 2020
• On Tuesday NY futures suffered the biggest daily percentage decline in more than five months so the next day supported by mill buying and as investors bought back the natural fiber.
Be careful what you wish for. Actually, I did not wish for a bit of a selloff in the cotton market. Last week I merely indicated that it would be healthy if we had a bit of a selloff this week.
We feel that neither speculators nor the trade may have a need or desire to add to their respective positions at this point. With the chart starting to look suspect and the commodity complex underperforming, specs will probably take a backseat for now. Spec buying since early December has been mainly short covering anyway and we don’t expect new spec longs to be rushing in at the moment.
Market Direction After Trade Agreement? It Depends
January 22, 2020
For nearly two years, we’ve experienced the highs and lows of the trade war between the U.S. and China. Countless times, they’ve appeared at the brink of resolve only to have one side or the other flinch thus prolonging the negotiations.
COTTON FUTURES MOVE LOWER ON “BUY THE RUMOR, SELL THE FACT” SCENARIO BUT REBOUND ON FRIDAY
January 19, 2020
The Mar contract finished very near unchanged on the week, giving up 6 points and finishing at 71.25, with the Mar – May spread strengthening to (94). The Dec contract gave back 11 points to settle at 72.37. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to higher Vs the previous Friday’s finish; the near unchanged part proved correct.
Market Movement from 13th Jan 2020 to 18th Jan 2020
• NY Future was highly volatile during this week. Last week close was well above 71 cents and manage up trend on Monday as trade deal date was closer. After trade deal market not see any bullish effect as tariff was continue from both side and after declaration of document market booked the profit and lost near 100 point. But speculators increase their long with all positive fundamentals.
Become “Somewhat Aggressive” With New-Corp Marketing
January 17, 2020
This was a positive week for agriculture. For cotton, closing the week near its daily high is always good, The U.S. and China resolved what was called Phase1of the trade dispute and Congress, after extensive and inexcusable delay, allowed the new NAFTA agreement to become law.
The market needed a break after momentum indicators were ‘overbought’ and US cash prices became expensive relative to other origins.
However, we feel that this is simply a consolidation in an uptrend and not the beginning of a reversal. With the Fed expanding its balance sheet by $400 billion since August, with financial markets still in exuberant mood,
Upward Price Trend But Set Reasonable Marketing Goals
January 13, 2020
Old crop March futures closed over 71 cents today — the highest closing daily price in 8 months. How thankful we are as an industry for the recovery we’ve experienced when we once thought all was lost.
Prices have increased over 10% since the most recent lows at 64 cents and almost 22% since the lows back in late August and early September.
ICE COTTON POSTS STRONG WEEKLY GAINS, WILL IT CONTINUE?
13-January-2020
The Mar contract gained 211 points for the week ending Jan 10, finishing at 71.31, with the Mar – May spread effectively unchanged Vs the previous week at (115). The Dec contract advanced 124 points to settle at 72.48. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to lower Vs the previous Friday’s finish, which proved to be incorrect.
The cotton bull continues, too young to strut but growing with confidence week after week. It’s likely time for it to stop and check its surroundings now that the December has traded to 72 cents.
Market Movement from 06th Jan 2020 to 11th Jan 2020
• During this week NY March future continuing its bullish momentum on market sentiment moved up from last Friday’s close of 69.20 to 71.31 gaining 211 points and touching 8 months high supported by optimism surrounding the US-China trade deal as the date of signing the Phase one of trade deal is getting closer. Singing in ceremony is scheduled to be held on 15th of January.
Speculators remain in control for now and the sanguine mood in the financial markets should keep the buying spree going. Speculators are probably only about 2.0-2.5 million bales net long at this point and they certainly have room to expand their position by several million bales. Let’s not forget that it was only 18 months ago when specs were 12.2 million bales net long.
MAR CONTRACT CONTINUES TO THREATEN BREAK ABOVE 70.00; CAN DEC BREAK 75.00 BEFORE SPRING?
January 06, 2020
The Mar contract picked up 28 points for the week ending Jan 3, finishing at 69.20, with the Mar – May spread effectively unchanged Vs the previous week at (118). Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to lower Vs the previous Friday’s finish, which proved to be correct – depending on one’s definitions of “near unchanged”.
Market Movement from 30th Dec 2019 to 04th Jan 2020
• This week was stable to firm in NY futures after crossing 200 days moving average speculators and funds increase their long positions. During the week NY March contract touched it’s high of 69.20 cents, but on Friday news of geo political tension between U.S. and Iran made market cautious to trade long.
Cotton’s 2020 year begins with a bullish tone and with strong upside fundamental potential compared to 2019. The little bull has its legs and has demonstrated some flair with a current seven-month high in prices.
It is time to continue north to higher prices. Let’s review some of the Bullish and Bearish factors facing 2020. Granted, I will miss some.
Speculative buying has forced the cotton market higher and with the exuberant mood prevailing in the financial world there is no end to this buying spree in sight. It therefore seems to be only a matter of time until the market moves past the 70 cents level.
January 2, 2020 By Jeff Thompson, Autauga Quality Cotton Association
Cotton prices remain in an uptrend dating back to late August. From nearly triggering a POP payment at 58.83, March futures has clawed its way back to a New Year’s Eve close of 69.05.
FIFTH CONSECUTIVE WEEKLY ADVANCEMENT FOR ICE COTTON, CAN IT CONTINUE?
30-December-2019
The Mar contract gained 96 points for the week ending Dec 27, finishing at 68.92 as the Mar – May spread weakened modestly to (116). This was the Mar contract’s fifth consecutive advancement, with a cumulative win total of 464 points. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to lower Vs the previous Friday’s finish, which proved to be incorrect.
Market Movement from 23rd Dec 2019 to 28th Dec 2019
• This is the last weekly report of 2019. We passed 2019 with the highest challenges in our trade. GUJCOT wish best earning to all stakeholders for the coming year.
The Mar contract gained 116 points for the week ending Dec 20, finishing at 67.96 as the Mar – May spread strengthened to (104). Since then, the contract has gained an additional 74 points. Our proprietary model (timely prediction available in our complete weekly report) predicted a settlement that was to be near unchanged to higher Vs the previous Friday’s finish, which proved to be correct.
Market Movement from 16th Dec 2019 to 21st Dec 2019
• This week was dominated by bullish NY future with hope of US China to sign real deal and decent US Export Sales. First time NY March contract crossed 68 cents mark and closed just below 68 cents with weekly gain of 116 points. Technically first time NY March contract crossed 200 day moving average so, some speculating buying was also seen in the future market.
New export sales, coupled with Washington’s agreement of the new NAFTA pushed by President Trump, benefited the market all week. The red March (March 2021) actually traded above 70 cents as prices climbed to six-month highs.
The market seems to have more bullish arguments at the moment and keeps pushing higher. After flip-flopping for several weeks, speculators seem to be finally transitioning back to a net long position, after the long-term downtrend on the weekly chart has been broken and March has moved above all of its moving averages up to the 200-day.
Slowly, the cotton market appears to be pulling out of the doldrums. The signs and signals are improving and, if actually realized, the timing certainly could not be better.
Prices advanced to a high of almost 68 cents Friday before closing at just under 67 — down just a bit from Thursday. Today’s action was the highest the market has been in over 5 months — since early June.
Christmas came early to the cotton market this week via several items of encouraging news. Starving for something positive, the market broke out the top side of a narrow trading range, closing above 67 cents for the first time since mid-July.
• NY December and March Futures traded full month in very small range. December M/M lost 4 points while March Future lost 52 points.
• During the month December touched low of 61.84 on 21-11-2019 but closed at 64.40 and on the same day March touched low at 64.01 recovered to close at 65.36.
• Roll over from December to March was crucial time and market get higher pressure during this time.
Highlights from the Inaugural Session of the 78th Plenary Meeting:
Consumers today are increasingly demanding information on the origin and history of the products they buy, putting pressure on retailers to provide transparency
Multiple technologies have the potential to provide that traceability, including blockchain and a host of products from private companies
Gujarat cotton crop is estimated as 1,06,94,302 Bales out of which 2,75,000 Bales will be of V-797 rest will be Shankar-6. Gujarat cotton crop yield is expected to rise by 32.97% and crop is expected to increase by 30.83%
we estimate total Gujarat cotton pressing to be 120-125 Lakh Bales of 170 Kg.
Most benchmark prices increased slightly over the past month. Indian prices were stable.
• The NY December futures contract rose from 62 to 64 cents/lb.
• The A Index rose from 72 to 75 cents/lb.
• In international terms, the China Cotton Index (CC Index 3128B) increased from 80 to 84 cents/lb. In domestic terms, the CC Index increased from 12,600 to 13,000 RMB/ton. The RMB strengthened against the dollar over the past month, from 7.10 to 6.99 RMB/USD (+1.6%).
Cotton Inc. Executive Cotton Update - November 2019
Executive Cotton Update - November 2019
Macroeconomic Overview: The IMF released an update to its World Economic Outlook last month. The first sentence of the report states that the global economy is in a synchronized slowdown. Correspondingly, the forecast for world GDP growth in 2019 was once again revised lower.
• NY Futures December bounced back from its low at below 57 cents in September and started October with 60.98 first day closing in better hope of resolution of US-China trade war. Although opening strength of ICE future remained well supported and market never came to that support during full month. ICE December crossed 65 cents mark in later part of the month.
Highlights from the November 2019 Cotton This Month include:
• The US-China trade war is dragging down both the global economy and international cotton trade • In 2019/20, India is projected to lead the world in production despite low yields • With production expected to grow by 1 million tonnes, and consumption projected to remain flat, prices will be under heavy pressure throughout the year
The Season 2018 -2019 started with bullish sentiment in India. Indian cotton crop was predicted 343 lakh bales at the start of the season against 365 to 375 lakh bales of season 2017-2018. Opening stock was low and mills requirement of new cotton was high. With bull sentiment season touched double top at 47,150 on 15th October at the start of the season.
Cotton Inc. Executive Cotton Update - October 2019
Executive Cotton Update - October 2019
Macroeconomic Overview: Concerns about economic growth remain. The commonly tracked producer manager indices (PMIs) released by the Institute for Supply Management (ISM) were lower in September. The manufacturing PMI, which can be a leading indicator for the overall economy, signaled contraction for the second consecutive month and posted its lowest value since 2009.
Highlights from the October 2019 edition of ‘Cotton This Month’ include:
• Global production is projected to outpace consumption slightly in 2019/20 • East Asian countries will continue to lead the world in consumption • Several major consuming countries will post consumption gains, but mostly 2% or less • High stocks and low demand for exports have driven prices to their lowest levels since 2016
Cotton Inc. Monthly Economic Letter September-2019
Cotton Market Fundamentals & Price Outlook
RECENT PRICE MOVEMENT
After falling in July, benchmark prices were stable in August and the first half of September.
• The NY December contract has held to levels near 58 cents/lb since mid-August.
• The A Index was steady near 70 cents/lb.
• In international terms, the China Cotton Index (CC Index 3128B) decreased from 88 to 83 cents/lb between early August and the present. Over the same period, the RMB eased 0.9% against the USD (from 7.05 to 7.12 RMB/USD).
Highlights from the September 2019 Cotton This Month include:
• Global production is expected to increase 5% to 26.9 million tonnes • Global consumption is projected to increase 1% to 26.9 million tonnes • The excess production will cause global stocks to swell to 18.3 million tonnes • Prices will be under increasing pressure as a result of the growing supply
Post estimates marketing year (MY) 2019/20 cotton production at 29 million 480 lb. bales (37.1 million 170-kilogram bales/6.3 MMT) with a planting area of 12.7 million hectares. MY 2019/20 mill consumption remains weak as mills accumulate greater cotton yarn stocks due to poor demand. Export prospects have diminished while imports are expected to remain stable as they are price competitive against domestic supplies.
The latest U.S. Department of Agriculture (USDA) estimates indicate that total U.S. cotton textile and apparel trade rose during the first half of 2019, compared with the corresponding 2018 period. U.S. cotton product imports totaled the equivalent of 9.0 million 480-pound bales of raw cotton during January-June 2019—compared with 8.8 million bales for the first 6 months of 2018—while cotton product exports declined slightly to 1.7 million bale-equivalents.
Cotton Textile exports reached a level of USD 739.17 million in June 2019 marking a decline of (-) 30.4 per cent against the corresponding month of June 2018, wherein exports were valued at USD 1,061.96 million.
In rupee terms, exports during the month of June 2019 reached a level of Rs. 5,132.72 cr. as against Rs. 7,199.39 Cr. in June 2018 marking a decline of (-) 28.7 per cent in rupee terms.
China cotton imports in 2019/20 are expected to surpass the previous year’s robust level, reinforcing its position as the world’s largest importer. The current 2018/19 estimate, boosted this month, is expected to be the largest in 5 years as China supplements domestic supplies amid ongoing auctions of State Reserve stocks. Despite this strong upward trend in imports, U.S. exports to China have weakened as Brazil, Australia, and other countries have expanded both exports and market share.
Looking Beyond the Uncertainties of Trade Tensions
The trade dispute between the United States and China has impacted cotton demand and supply chains over the course of the past year. On 1 June 2019, China is set to increase tariffs on $60 billion of US goods in retaliation to the US tariff increase on the remaining $200 billion worth of Chinese imports.
While corn remains the major safrinha crop for Brazilian farmers, more cotton acreage is being planted in Mato Grosso this spring, as well.
Over the past two years, cotton planting has increased by nearly one-third for the safrinha in Mato Grosso. The Brazilian Association of Cotton Producers(Abrapa) forecast cotton acreage to grow to 1.4 million hectares (3.46 million acres). Mato Grosso accounts for about 88% of Brazil’s cotton production.
Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical revisions have been made to India’s balance sheet for the years 2002/03 through 2013/14, with the stock adjustment carried forward. The revisions are based on the conclusion that market yard arrivals data underreported arrivals in the early portion of the harvest season. This conclusion was based on observed market activity in November for several years.
