Not much has changed since last week, as neither the large spec and index fund long nor the sizeable trade short have been willing to reduce their exposure. The latest CFTC report still showed a big 19 million bale net position on both sides. The question is who will blink first?
With only three weeks to go until December options expiration, mills have their work cut out to reduce their still large unfixed on-call position in December and this could generate buying pressure.
After participating in Wednesday’s commodities rally, the cotton market reversed course Thursday to settle sharply lower. Two nagging negatives perhaps undermining the market’s bullish trend are the unfolding 2021 harvest and the inability to adequately ship cotton.
After many kneejerk moves, the cotton market did finish this third week of October higher. Of late, the market has been in a trading rhythm whereby prices would zoom higher during the “Chinese hours,” only to retreat to some degree in the American hours.
Yet, prices have reflected a staunch determination to stay aloft. Currently, the market is being weighed down by growing harvest pressures, plus the inability to widely disperse cotton due to the global shipping crisis.
PRICES MADE LARGE MOVES THIS WEEK • Excellent Week for Equities Markets • Export Sales Report Picks Up • Cotton Harvest Still Lags • Traders Examine Daily Classing Reports and Cash Market Offers
Although prices made large moves every day of the past week, December futures trading was relatively constrained to the range from Tuesday’s low at 105.25 cents per pound to Thursday’s high at 111.35 cents.
ICE Cotton jumps over 2% as weaker dollar lifts demand
ICE cotton futures climbed over 2% on Wednesday as a slide in dollar aided demand for the natural fiber, with investors looking ahead to a weekly exports sales report for cues on demand.
The cotton contract for December gained 2.64 cents, or 2.5%, to 110.47 cents per lb by 13:45 EDT (1545 GMT).
After languishing sideways for several sessions, the cotton market finally came alive and shot to the upside. In fact, at one time Wednesday, spot December came within 0.100 cent of touching limit up. However, some profit-taking did pare a portion of those gains into the close. The market’s rally was likely fueled by outside markets.
The cotton market had a wild session Friday, moving from limit-up bid to lower, and then slightly higher at the close. After a night of potential strong Chinese buying, ICE Futures were limit up, however, traders became disappointed with USDA’s weekly export-sales data.
Those numbers show sharply lower sales and starkly lower shipments. Thus, profit taking emerged, sending prices down. However, given that the trend remains undeniably up, the market did regroup to finish higher.
After posting a 4.29-cent high/low range, the cotton market settled out with spot December and March slightly lower, while the deferred months were slightly higher. Volume Monday paled to that of recent days.
Market Movement from 11th Oct 2021 to 16th Oct 2021.
• This week was highly volatile with 4 out of 5 sessions ended in red. WASDE was bearish to neutral so usually market was down this week. Anticipating good export sale to China on Thursday market gained 300 points and on Friday morning limit up but after disappointing export sale numbers market gave up all gain. Ultimately NY December close with weekly loss of 327 points.
COTTON MARKET MOVES LOWER ON WASDE WEEK; PRICES REMAIN WELL NORTH OF $1
October 17, 2021
The ICE Dec cotton contract gave up 327 points last week, finishing at 107.33, with the Dec – Mar spread inversion contracting to 233. The cotton market failed to challenge the previous intraweek high, which was northward of 116. Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved to be incorrect.
Once upon a time, a triple digit move in the market after a day of trading would grab everyone’s attention. Nowadays, such swings are made in a matter of minutes. Needless to say, this market is not for the faint of heart. Just last week it traded within a range of ten cents, which included two limit up moves.
The cotton market sloughed off triple-digit losses to close positively Tuesday. Its recovery was inspired by uplifts in several outside markets, including the grains, the energies, the metal, and the stock index futures. Also, the lower U.S. dollar helped encourage inflation-sensitive markets higher as well.
After getting close to a 50% retracement of the up move between 88.95 and 116.48 cents, the market has started to turn up again, which might force mills to become more aggressive with their fixations and/or upside protection via options.
Although there may have been some profit taking by speculators during this correction, the nearly unchanged open interest tells us that speculators have staying power and that time is working against the shorts.
The cotton market touched limit up for a moment Thursday as frenzied traders bought into the break. Most likely they were encouraged by alleged overnight Chinese buying and the resilient technical trend. Traders are anticipating Friday’s delayed weekly export sales for confirmation that China remains a devout buyer of U.S. cotton.
Cotton futures touch 2 – week low on WASDE's China demand cut
ICE cotton futures dipped to a two-week low on Wednesday, as projections for lower Chinese consumption in a monthly U.S. federal crop supply-demand report weighed.
Cotton contract for December was down 1.84 cents, or 1.7%, at 104.54 cents per lb, by 12:58 p.m. EDT (1658 GMT), having earlier eased to its lowest since Sept. 30.
After a pretty wild Sunday night, the cotton market was very muted for much of Monday’s day session. Some hedging selling from commercials was evident, while other selling included speculative profit-taking. Just last week the market had zoomed to a 10-year high, as fears of production losses across the Northern Hemisphere fueled the bullish trend.
The cotton market flirted with limit-down prices Tuesday amid USDA’s monthly supply-demand report. In the data, the tabulators lowered the U.S. production, idled exports, but lowered ending stocks. However, in the world categories, global production increased, consumption decreased and global carryout jumped some 450,000 bales.
Tuesday afternoon, USDA will issue its delayed crop harvest/condition report. Last week the crop was 13% gathered and the good-to-excellent conditions were 62%.
The cotton market lost more bullish ground Wednesday as traders viewed USDA’s reduction in Chinese consumption in Tuesday’s WASDE as a big negative. One explanation offered for the tapered consumption is related to China’s failing energy situation. Allegedly, some Chinese textile mills are said to be on a restricted production schedule, as the country faces some brownouts and some rolling blackouts.
Supply Increasingly Bullish, but What About Demand?
October 11, 2021
As if on steroids, last week’s market continued its near vertical climb from 89 cents. The December contract has now posted new closing highs in nine of the last 11 trading sessions. Last week, in heavy volume prices traded in a very wide range of thirteen cents from a low of 103.58 to a high of 116.48, closing Friday at 110.60 for a gain of almost six cents on the week.
Hoping to cure its overbought situation, the cotton market traded sideways to higher Thursday on muted volume. Thursday’s action was quite a contrast to recent sessions when cotton was testing permissible limits and was fueled by huge volumes. Nonetheless, December cotton closed higher Thursday, keeping its bullish trend and its recent extreme vertical move intact.
Rally in cotton futures tires; dip in weekly exports weighs
ICE cotton futures took a breather on Thursday from a blistering rally that has seen prices reach their highest level since mid-2011 to lock in profits, following a federal report that showed lower export sales of the fiber.
The cotton contract for December fell 0.37 cent, or 0.3%, to 110.69 cents per lb, at 13:00 p.m. EDT (1700 GMT).
With China probably coming back with speculative vigor after its week-long holiday and with the WASDE next Tuesday possibly showing some bullish corrections (Indian stocks and Chinese imports), it is difficult to see this rally coming to an end anytime soon.
After scaling near 10-year-price highs this week, the cotton market witnessed a bit of profit taking this Friday. By most technical measurements, the market is overbought with the speculative funds thought to be more than excessively net-long. Volume this week has been huge.
DECEMBER FUTURES FINISH 581 POINTS UP FOR THE WEEK
• Stocks Struggled in Sideways Motion Until Thursday • Rains Delay Harvest to Slowest Pace Since 2013 • October Crop Production and WASDE Reports Next Week
Futures prices stalled slightly last Friday after making another fresh high. On Monday, the December contract found support at the week’s low of 103.58 cents per pound before turning higher.
COTTON MARKET CONTINUES TO MOVE HIGHER AHEAD OF OCT WASDE RELEASE
Oct 10, 2021
The ICE Dec cotton contract continued to surge last week, gaining 607 points at 110.60, with the Dec – Mar spread inversion contracting to 269. The cotton market traded north of 116 on its intraweek high. Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved to be correct.
Market Movement from 02nd Oct 2021 to 09th Oct 2021. • This week was also dominated by bulls. NY December crossed 116 intraday before closing the week just above 110 cents. Speculative run helped NY December to gain 607 points during the week. From 20 September to 8th Oct NY December gained nearly 22 cents. • US Export sales was lower with higher prices, mills stayed away from purchase or fixation. 2,60,000 bales sold and just 1,28,000 bales shipped.
*Seat at the Dollar Table Depends on Mother Nature*
*October 02, 2021*
With apologies to Mr. Rogers, “It’s a beautiful day in the neighborhood, a beautiful day in the neighborhood, want you be my Magic, Mr. Cotton…” Cotton has us just singing away as past and present demand has pushed and pushed the market to 11-year highs and that Magic Dollar level. Prices settled Thursday evening at 105.80, basis December futures, and were unchanged at Friday noon.
Amid production concerns, transportation restraints, and China’s renewed appetite for natural fiber, dollar cotton seemed almost inevitable. Like an elusive brass ring, we’ve only seen it a handful of times over the course of history. In fact, December cotton futures have closed at dollar or higher only seven percent of the time in the past 16 years.
The cotton market ended Tuesday with three out of four old-crop contracts months settling at limit up. In fact, synthetically, that is employing the options, and the market could open 1.25 cents higher Tuesday night. Speculators and Mills’ on-call fixation buying continues to undergird prices.
The cotton market finished Wednesday’s session higher, but not before it initially traded limit up, then spilling to nearly unchanged, and then up again. No question that emotions, anxieties and knee-jerk reactions highlighted the trading. Volume was strong at 70,000-plus contracts. Of course, the background fundamentals that are driving the center on pricing are inflationary conditions, reduced global production and perceived strong demand from China.
After threatening the moon this week, the cotton market did experience a reasonable, but anticipated, correction Friday. Coming into Friday’s session, December cotton had already zoomed some 9.00-plus cents higher, so a bit of mitigation was expected. The source of the selling was producer hedging and speculative profit-taking. Volume was equally massive, compared to recent days.
After overnight selling attempted to build upon Friday’s reversal, cotton futures were able to stabilize and finished higher Monday. Several research groups labeled Friday’s action as a key reversal with a certain national analyst actually selling the ICE Futures.
• U.S. Federal Spending and Debt Limit Fight Seem to Escalate • Export Sales Report Confirms Surge in Demand • 11% of Cotton Belt Harvested • Weather is Threat More to Quality than Quantity
While China has brought great uncertainty to the market and there might be some fundamental reasons for prices to move higher, this has clearly turned into a showdown between spec longs and trade shorts.
ICE cotton futures post best quarter since March 2011
ICE cotton futures jumped more than 3.5% on Thursday and registered their best quarterly performance since March 2011, supported by strong export sales and worries over crop damage due to heavy rains in Texas.
The cotton contract for December settled up 3.86 cents, or 3.79%, at 105.8 cents per lb.
Sloughing off the fears of strong position squaring at the end of the month and the third quarter, cotton ended with its eighth consecutive session of higher closings. The market is obviously concerned with the potential crop setbacks across the Northern Hemisphere.
Those worries include the U.S., India and China. Of course, there is a corresponding hefty demand for cotton as well. Thursday, USDA reported a half-million-plus bales were purchased last week with China buying the lion’s share.
The cotton market affirmed its historical dollar closed Wednesday when the December market settled above $101. This market hasn’t been this high in 10 years and, from all appearances, it seems destined higher. Yet, with Thursday’s monthly and quarter end, volatility could run high and profit-taking could set in towards the weekend.
Continuing on its upside tear, the cotton market traded the $101.55 level Tuesday. Such prices have not been seen in 10-plus years. Strong Chinese demand, along with fears of a potentially shaky Texas harvest, are collectively undergirding prices. The market is also anticipating the political situation regarding new stimulus spending now occurring in the U.S. Congress.
ROSE ON COTTON – COTTON MARKET FINISHES HIGHER ON WEEK AMID VOLATILE TRADING ACTION
Sep 27, 2021
The ICE Dec cotton contract commenced the week with a sharp break but finished with an even more impressive rally to finish up 366 points on the week at 95.99, with the Dec – Mar spread inversion ballooning to 142. Last weekend our models predicted a finish on the week that was to be near unchanged to lower Vs the previous Friday’s settlement, which proved to be incorrect.
After trading calmly in a narrow range for over a month, last week’s market activity was nothing short of a rollercoaster ride. Expecting a breakout of some sort at any time, we were jolted Monday as prices fell over three cents closing below 90 for the first time since August 3.
The cotton market nearly hit limit-up levels early Monday morning as a flurry of buyers chased the futures. Fears that the U.S. crop may come in smaller due to weather adversities, plus potential trouble with the Indian crop and outright technical buying sent prices to their highest levels in 10 years.
ICE cotton futures gained for a fifth straight session on Monday, climbing as much as 4% to a contract-high as funds stepped up purchases and demand from China, the biggest natural fiber consumer, remained steady.
The cotton contract for December rose 1.72 cent, or 1.8%, to 97.71 cents per lb, by 1:30 p.m. EDT (1730 GMT).
Earlier, the December contract jumped 4% to hit a contract-high of 99.86 cents per lb.
1. CHINA DOWNSTREAM TEXTILE SECTOR UNDER SEVERE STRESS FROM ENERGY RATIONING/LOGISTICS
2. “RECORD CONTAINER SHIPS DRIFTING OUTSIDE US WEST COAST PORTS”; ENERGY SHORTAGE SHUT TEXTILE PLANTS AND FREIGHT COST 25% OF RETAIL DENIM IS COOL; DEMAND DRIVING INCREASE IN COTTON USE
3. CFR BASIS LEVELS VERY ELEVATED AS 4th QUARTER 2021 ARRIVES
Open Interest Down 10,601 Contracts from Last Week Jobless Claims Higher Than Expected Net Upland Sales Total 345,400 Bales Share of Crop in Good or Excellent Condition Higher Than the Last Four Years
ICE cotton futures gained on Thursday, supported by a weaker dollar and a strong weekly US export sales report, with risk-on sentiment in the equity markets adding to the upbeat mood.
Market Movement from 20th Sep 2021 to 25th Sep 2021
• This week will be noted as highly volatile week on both sides. On Monday with fear of Chinese real estate giant’s default, market lost 331 points. Market recovered in next 3 days with support of Fed's support with no increase in interest rate and also huge buying by China. On Friday market jumped to its lifetime high on ICE December future closing at 95.99 cents gaining 366 points in a single day.
December cotton closed up 3.53 cents at 95.99 cents Friday, a new contract high and among the highest closes for a December contract since 2012. The week started with a steep 3.31-cent drop as investors panicked over Evergrande’s possible debt default in China, but quickly bounced back, helped by Wednesday’s repeated Fed commitment to low interest rates and Thursday’s strong report of 345,400 running bales of export sales, nearly two-thirds of which went to China.
The technical breach on Monday flushed out some spec longs and allowed mills to fix a decent amount of their December commitments. This helped to defuse a potential short-squeeze, although mills are not quite out of the woods yet.
With financial markets quickly reverting to ‘risk on’, spec liquidation stopped, while mill fixations and possibly China buying lifted the market back into the 92-95 settlement range, where we had been in previous five weeks.
ICE cotton futures gained on Thursday, supported by a weaker dollar and a strong weekly US export sales report, with risk-on sentiment in the equity markets adding to the upbeat mood.
The cotton contract for December was up 0.81 cent, or 0.89%, at 91.68 cents per lb by 11:03 a.m. ET (1503 GMT). The contract is up for the third straight session.
Spurred on by an impressive weekly export-sales report and a stout Dow Jones, the cotton market closed with triple-digit gains Thursday. Thursday’s weekly sales number was 345,000 bales with China as the top buyer, which was above the running averages of 300,000-plus bales. The Dow Jones and related markets took another look at the Federal Reserve’s action and realized tapering was on hold until late November, if even then. So, the Dow gained back over 600 points.
The cotton market finished its Wednesday’s session markedly higher as positive outside markets were encouraging to buyers. To that end, cotton saw mill-type fixation buying, as well as some speculative bargain hunting. On Monday, the market collapsed some 3.00 cents amid certain Chinese financial news, but since that time with that problem somewhat ebbing, cotton has gained back 2.00 cents.
ICE cotton futures rose more than 1% on Tuesday, with mills taking advantage of a steep fall in the previous session to buy back some of the natural fiber, while a weaker dollar offered further support.
Taking its cue from a recovering Dow Jones, the cotton market finished back above the 90-cent mark Tuesday. Subscribers are aware of Monday’s massive financial implosion, which was caused by the potential default of a Chinese real estate company.
Its outstanding debt is rumored to be greater than 300 billion U.S. dollars. At any rate, Tuesday the stock market witnessed a decent recovery which inspired cotton, among other commodities, to follow suit.
The cotton market was steeply lower Monday as economic rumblings out of China unhinged many of the world’s financial markets. The Hong Kong market was off 4%, while the Dow Jones was down some 800 points at the time of cotton’s closing. Some analysts believe this Chinese $300 billion default real estate problem may test the soundness of its banking system.
When Will the Current Range Break – And in What Direction?
Some things in this world are just difficult to explain such as Einstein’s Theory of Relativity, the Fibonacci Sequence, or why a tomato has more genes than a human. Equally as hard to explain is why cotton has traded in a tight range above 90 cents for over a month amid a host of growing negative influences? Some of these include a supposedly larger crop, persistent Covid concerns, a fragile economy, continued supply chain disruptions, and tense U.S. – China relations.
COTTON MARKET MOVES LOWER TO TEST NEARBY SUPPORT AS HARVEST SEASON NEARS September 18, 2021
LOUIS W. ROSE IV AND BARRY B. BEAN
The ICE Dec cotton contract gave up 117 points on the week to finish at 92.33, with the Dec – Mar spread inversion effectively unchanged at 74. Last weekend our models predicted a finish on the week that was to be near unchanged to lower Vs the previous Friday’s settlement, which proved to be correct.
Cotton heads for third straight weekly fall on firmer dollar
ICE cotton futures fell to a one-week low on Friday and were on track for their third straight weekly decline, weighed down by a jump in the U.S. dollar.
Market Movement from 13th Sep 2021 to 18th Sep 2021
• NY futures remained easy during week with lower volume. Speculator are now silent with market not able to cross technical resistance area. Overall NY December future closed with 117 points loss during this week.
• Export sales were decent around 3 lakh bales and shipment also better. China was among big buyers. But market ignored good US export sales and closed lower.
Cotton spent much of its Friday trading lower, albeit on unenthusiastic volume. The market was mainly pressured by certain outside financial markets that tanked on fears that the Federal Reserve will initiate its tapering policy next week.
The Fed meets on Tuesday/Wednesday, and then makes its announcement Wednesday afternoon. Some analysts feel invoking tapering is tantamount to increasing interest rates. With that notion, the U.S. dollar was higher Friday.
ICE Cotton slips as stronger dollar offset higher exports
ICE cotton futures fell for a second straight session on Thursday, as a firmer U.S. dollar overshadowed a weekly federal report showing higher export sales.
The cotton contract for December fell 0.65 cent, or 0.7%, to 92.72 cents per lb by 11:25 a.m. ET (1525 GMT). It traded within a range of 92.52 to 93.97 cents per lb.
The market can’t seem to make its mind up, and neither can we! On the one hand we have this large spec net long position, which has the potential to squeeze mills who still have over 5 million bales to fix on December. If speculators were to hang on to their positions, then a lack of sell-side liquidity could force trade shorts to pay up.
The See-Saw at 90-Plus Continues – What Lies Ahead?
September 16, 2021
The strong uptrend in prices seems to have leveled out. Prices (Dec futures) have been in a range of mostly 92 to 95 cents for the past month plus. Dec closed at almost 95 cents back on August 17 but followed by at a close at 92.3 cents on September 1.
Last week ended at 93.5 cents—down 52 points for the week. So far this week (through today, September 15), Dec is down another 13 points to 93.37 cents.
The cotton market ended lower Thursday as traders are beginning to look ahead to a huge crop. However, adverse weather across the south from Hurricane Nicholas, among other weather events, is disrupting the development of that crop.
Cotton edges lower as harvest nears; export sales data in focus
ICE cotton futures dipped slightly on Wednesday, as traders geared up for the upcoming weekly export sales data, with the harvest season on the horizon.
The cotton contract for December fell 0.22 cent, or 0.2%, to 93.44 cents per lb, by 12:56 p.m. ET (1656 GMT). It traded within a range of 92.98 to 93.78 cents a lb.
The cotton market maintained a low profile Wednesday as it’s high-to-low range was tight and volume very subdued. Traders are keying on Thursday’s weekly export-sales report. Last week’s U.S. sales topped 450,000 with China buying some 261,000 bales. With USDA lowering its world carryout numbers, traders suspect futures sales will be strong.
COTTON MARKET OFF MODESTLY ON ABBREVIATED WASDE WEEK; TRADE ACKNOWLEDGES END OF AN ERA WITH PASSING OF INDUSTRY ICON
Sep 13, 2021
The ICE Dec cotton contract gave up 52 points on the abbreviated week to finish at 93.50, with the Dec – Mar spread inversion effectively unchanged at 77. Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved to be incorrect. However, we did not recommend trading any bias due to the WASDE’s release on Friday.
The cotton market was higher Tuesday, albeit on low volume. Such has been a true characterization of the market ever since its new August high was established, that is one of slow volume and tight ranges. However, conventional wisdom would suggest cotton’s immediate fundamentals, that is a large crop, huge net long speculators and the forthcoming harvest, are stacking bearish.
ICE cotton futures eased on Monday, pressured by a stronger dollar, as traders continued to assess a projected increase in output in the US Department of Agriculture’s (USDA) September supply and demand report.
Cotton contracts for December fell 0.85 cent, or 0.9%, to 92.65 cents per lb by 12:47 p.m. EDT (1647 GMT).
The cotton market started this new week on Sunday night with a lower opening, and unfortunately ended that way Monday. Monday’s volume was quite muted (18,000), which is consistent with narrow ranges (0.81 cent). Some traders fear that the managed-money speculators have acquired a burdensome bullish position as evidenced by the commitment of traders report of last Friday.
Market Movement from 06th Sep 2021 to 11th Sep 2021
• Not much movement on NY cotton futures during this week. Market was lower on Thursday due to adjusting position before WASDE. Over all NY December closed this week with 52 points weekly loss.
• Bullish numbers of expert sale was ignored by market due to bearish WASDE report.
DECEMBER CONTRACT CLOSES WEEK AT 93.22 CENTS PER POUND
• Unemployment Claims of 310,000 as of September 4 • Total Export Commitments Still Lag Recent Year’s Pace • Texas Production Big Shocker on September Crop Production Report • 61% of Crop Rated Good or Excellent
Beginning stocks are slightly lower than last month in the 2021/22 U.S. cotton estimates, but a much larger increase in production means that both exports and ending stocks are higher than estimated in August. U.S. cotton production is forecast at 18.5 million bales, up 1.2 million bales despite a 4 percent decline in harvested area, largely due to increased projected yields in Texas. With both world trade and U.S. supplies higher this month,
We feel that after trading sideways in a 92-95 cents box for the last four weeks, December is getting ready to make a move. Tomorrow’s WASDE could provide the trigger if there are any surprises, but we also need to watch economic developments, which could trip up the spec long like it did in 2018.
While we can’t rule out another spike higher, we become increasingly concerned about an economic slowdown going forward and believe that it is prudent to start putting some downside protection in place.
ICE cotton futures eased on Thursday ahead of a monthly supply and demand report, with some traders expecting the United States Department of Agriculture (USDA) to raise its estimate for US supply in the report.
Cotton contracts for December fell 0.45 cent, or 0.5, to 93.63 cents per lb by 1:00 p.m. EDT. It traded within a range of 93.63 and 94.67 cents a lb.
The cotton market was moderately lower Thursday as traders adjusted their position for Friday’s monthly supply-demand report.
The cotton market was moderately lower Thursday as traders adjusted their position for Friday’s monthly supply-demand report. Generally speaking, the trade is expecting less acres but increased yield. Prior to its release, USDA will issue its weekly export-sales report. Last week’s business was a dismal 125,000 bales sold.
The cotton market initially traded higher Wednesday, even surpassing the 95.00-cent mark, but overhead grower-selling, as well as some speculative squaring, pushed prices off.
ICE cotton gains as approaching storm clouds crop outlook
ICE cotton futures firmed on Wednesday on concerns that a weather disturbance developing in the U.S. Gulf of Mexico could hurt harvests in key regions, with crop conditions already downgraded in a weekly federal report.
Cotton contracts for December climbed 0.42 cent, or about 0.5%, to 94.47 cents per lb, by 12:14 p.m. EDT (1614 GMT), and were up for a fourth consecutive session.
Cotton Trades in Sleepy Session Tuesday September 7, 2021
The cotton market traded in a muted funk all day Tuesday. Volume was low, and the range was less than 1 cent.
The cotton market traded in a muted funk all day Tuesday. Volume was low, and the range was less than 1 cent. Traders are wanting to see what new acre revelations might emerge in Friday’s September WASDE. For some time, traders have been questioning this year’s planted acres from USDA versus the certified acres as reported by the FSA.
After testing near term lows, the cotton market rallied at week’s end, settling above 94 cents, basis December futures. The attempt to climb to the magic one-dollar level is somewhat stimmed by the potential for the U.S. crop to climb to over 18 million bales. The current estimate is 17.3 million bales, but late as the crop is, Mother Nature could still give us an unusually late fall; thus, allowing for the plant’s very young fruit to develop harvestable bolls.
COTTON MARKET RECOVERS PREVIOUS WEEK’S SETBACK AHEAD OF IDA COMING ASHORE
Sep 4, 2021
The ICE Dec cotton contract gave up 82 points on the week to finish at 94.02, with the Dec – Mar spread inversion weakened to 76. Dec again seriously challenged the 95.00 level on the week but failed to trade north of this level. Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved to be incorrect.
• Markets in “Risk-Off” Mindset Monday and Tuesday • Pakistan Biggest Buyer of Cotton This Week • 70% of Crop Rated Good or Excellent • USDA Reports Delayed for Labor Day
Market Movement from 30th Aug 2021 to 04th Sep 2021
• NY December future declined from Monday to Wednesday but when hurricane IDA passed without much damage to cotton crop, it recovered in last two sessions and closed this week with just 82 points loss.
• US Export sale was slow with just 119,700 bales sales for current year and only 23,800 bales sales for next year. Shipment also was down to just 173,300 bales.
The cotton market started Friday higher and ended higher. A softer U.S. dollar, stemming from the wildly missed September jobs report, helped to buoy prices. In addition, traders are looking ahead to next week’s several cotton reports including crop condition, weekly export sales and the monthly supply-demand report.
The latter could prove very influential as USDA will supposedly address the rift between USDA’s acres and the FSA’s certified acres; at stake may be some 900,000 fewer 2021 acres.
Cotton rebounds from one-week trough on weaker dollar
ICE cotton futures rose on Thursday, as a weakened dollar provided some respite after concerns over higher supply of the natural fiber sent it to a one-week low in the previous session.
Not much has changed since last week, as spec longs and trade shorts continue the standoff with their historically significant positions. This has boxed the market into a 92-95 cents window for the last three weeks.
The WASDE on September 10 could be the next trigger point, as most traders expect an upward revision of the US crop to over 18 million bales, but there could also be some bullish surprises, like a much overdue downward adjustment of Indian ending stocks.
The cotton market finished higher Thursday as traders eyed a Gulf disturbance on the National Hurricane Center’s website. Early tracking has the weather heading towards the Mexico-Texas Border, making the Valley crop susceptible to trouble. In addition, the S&P posted all-time highs Thursday, which lent some peripheral support to cotton.
Failing to let Hurricane Ida bullishly motivate prices, the cotton market took a nosedive Tuesday. Nervously long speculators and unpriced growers collectively slanted to the sell side. In fact, as one subscriber said to us, “the tug of harvest is in the air.” With that notion, December cotton is edging ever closer to having an “eight handle” on its price.
Strong Prices Continue – So Far with Few Hiccups Aug 27, 2021
Most of the time, but not always, prices tend to trend down into the harvest months. It’s called seasonality and for that reason, farmers like to price some portion of their crop prior to harvest. How much varies from farmer to farmer and depends on how much risk he/she is willing to take on an unknown future.
This continues to be shaping up as one of those not-very-often years where farmers stand to enjoy both a good crop and at a good price.
Advancing 174 points, December cotton futures closed the week at 94.84 finding itself within two cents of the contract high of 96.71. Though trading activity was much less volatile than that of the previous week, a host of uncertainties remain.
The cotton market finished lower Monday, sloughing off the loss potential from now Tropical Storm Ida. The storm is bringing copious amounts for rainfall to the U.S. Delta and beyond. Supposedly, the delta cotton crop is some 50% open, but acres there are not as prolific as prior seasons. This past winter/spring, both corn and soybeans rallied to near eight-year highs siphoning off acres from cotton.
COTTON MARKET RECOVERS PREVIOUS WEEK’S SETBACK AHEAD OF IDA COMING ASHORE
Aug 29, 2021
The ICE Dec cotton contract gave up 174 points on the week to finish at 94.84, with the Dec – Mar inversion strengthened at 101. Dec seriously challenged the 95.00 level several times throughout the week but trading north of this level was not to be. Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved to be correct.
Market Movement from 23rd Aug 2021 to 28th Aug 2021
• This week NY December future consolidated steadily and closed with 174 points weekly gain.
• US Export sale was also decent with new commitment of 2,59,400 Bales for current year and 67,900 bales for next year. But China remained absent in new sales. Good shipments above 2 Lakh bales.
DECEMBER FUTURES HIT HIGHEST PRICE SINCE MARCH 2014
• Concerns that “Transitory Inflation” is not so Transitory Arise • El Salvador Last Week’s Biggest Cotton Buyer • 79% of Cotton Belt Setting Bolls • Tropical System in Gulf of Mexico Key to Watch
Cotton just does not want to go down. Attempts to push prices below 93 cent have been short lived and have come without any muscle. Prices continue to creep back to 95 cents while keeping their eye on the 96-cent resistance level and the nearby objective of 97-100 cents. Additionally, prices continue to trade above all the moving average trend lines.
The cotton market finished its Friday session in the plus column as Ida was upgraded to Hurricane status in an afternoon update from NOAA and the Federal Reserve’s comments were friendly to the financial markets.
Spec longs and trade shorts have been keeping each other in check lately, as their positions have expanded to historically significant levels. Sooner or later this stalemate is likely to break, with the bulls seemingly having the better odds, at least that’s what the options market is telling us.
ICE cotton dips for first time this week as dollar gains
ICE cotton futures eased on Thursday to snap a four-session long streak of gains, weighed down by an uptick in the dollar.
Cotton contracts for December fell 0.48 cent, or 0.5%, at 94.02 cents per lb, at 11:55 a.m. EDT (1555 GMT). The contract shed as much as 1.2% to 93.38 cents per lb.
Market Ends Higher, Eyes Disturbance August 25, 2021
The cotton market ended Wednesday slightly higher, as it anticipates Thursday’s export sales and the possible formation of a tropical disturbance, now lurking in the lower Caribbean. Some tracking paths have that storm moving towards the coast of Texas, putting the Rio Grande crop at risk. Growers there hold memories of Hurricane Harvey from 2017. That event really devastated that early Texas Valley Crop.
Market Sloughs Off Superior Ratings August 24, 2021
The cotton market finished higher Tuesday despite USDA’s glowing rating of the crop’s condition from Monday afternoon. Currently, USDA has the 2021 crop pegged at 71% good to excellent, which rivals its modern-day record of 75% good to excellent set back in 1987. In addition, there were strong rallies Tuesday in the grains, energies, metals and equities.
ICE cotton futures firmed on Wednesday, rising for a fourth straight session, on concerns about a potential hit to upcoming harvests from an Atlantic storm projected to strike the US Gulf coast.
Cotton contracts for December rose 0.57 cent, or 0.6%, to 94.75 cents per lb, by 12:15 p.m. EDT (1615 GMT).
ICE cotton futures weakened on Tuesday, after a federal weekly report indicated improvement in crop conditions, boosting concerns of increased supplies in a tight market.
Cotton contracts for December fell 0.09 cent, or 0.1%, to 93.27 cents per lb, by 11:49 a.m. EDT (1549 GMT). Earlier, the contract dropped as much as 1.6% to 91.91 cents per lb.
Cotton edges up on wider commodities rally, dollar dip
ICE cotton futures inched up on Monday, lifted by a dip in the dollar and tracking a rebound across broader commodity and financial markets.
Cotton contracts for December were up 0.22 cent, or 0.2%, to 93.32 cents per lb, by 12:15 p.m. EDT (1815 GMT). Prices on Friday hit their lowest levels since Aug. 12.
Market Stays Aloft on Small Volume August 23, 2021
Taking its cue from a falling U.S. dollar and a surging Dow Jones, cotton managed to eke out a slightly higher close Monday. Volume however was a mild 20,000 contracts. The market was also helped along by very positive data from the CFTC. Its report indicated that managed-money funds have surpassed their February peak as far as contracts owned.
Despite an improving U.S. crop, a host of uncertainties are beginning to creep into the market. Cotton prices, technically still in an uptrend, are trading in wild swings fearful of these uncertainties. The high-low spread last week was almost five cents from a nine year high of 96.71 to a low of 91.80. Fortunately, it recovered slightly settling at 93.10 on Friday for a loss of 122 points on the week.
COTTON MARKET FINISHES WEEK LOWER AFTER SERIOUSLY CHALLENGING OVERHEAD RESISTANCE Aug 22, 2021
The ICE Dec cotton contract gave back 122 points on the week to finish at 93.10, with the Dec – Mar spread inversion weakened at 84. Although our models predicted a higher finish on the week, we ultimately recommended a short position.
Futures were lower on the week on weakening US export sales data, a 1% strengthening in US currency, spec profit-taking, producer selling, and the market’s overbought condition.
*Market Movement from 16th Aug 2021 to 21st Aug 2021*
• NY December extend rally post WASDE till Tuesday. On Tuesday NY December crossed 96.90 cents but gave back all gain sameday. Historically 96 cents proved great resistance. Profit booking by speculators pushed back the market and ultimately NY December closed with weekly loss of 122 points.
• Export sale was decent with 253000 bales for current year and 59500 bales for next year. While shipment also was decent at nearly 225000 bales.
Demand Driven Bulls Trample Over 93 Cent Resistance
August 14, 2021
Many thought USDA’s August estimate of the U.S. crop might be a scene from a “wild wild west shoot-‘em-up,” but everyone was bowled over, nonetheless. So much for the market not pushing above 93 cents until the September supply demand report! USDA’s August estimate was what I had expected the September report to look like. Kudos to USDA for biting the bullet.
The cotton market ended a bit higher as outside selling pressure, so prevalent on Thursday, abated Friday. Specifically, the dollar was a shade lower, while the Dow Jones was moderately higher. Cotton had become slightly oversold, having tumbled from Tuesday’s high of 96.71 cents to Friday’s low of 91.80 cents. Thus, heading into the weekend, there was a certain amount of position squaring done by traders.
The cotton market finished sharply lower Thursday as traders took to heart the Federal Reserve’s minutes, revealing its intention of initiating their tapering process in the fourth quarter this year. Beyond cotton, the grains, metals, energies, and other financial markets declined as well.
ICE cotton futures steadied on Wednesday after soaring to a more than seven-year peak in the previous session, as traders reassessed crop conditions in the wake of a storm that brought rain to some key cotton-growing regions.
It looks like we are headed for another showdown between spec longs and trade shorts, as their respective positions have been growing to sizeable levels.
The question is whether the outcome is going to be similar to 2011 or 2018? Ten years ago lower than expected Chinese stocks and spec buying fueled a historic short-covering rally. In 2018 we saw speculators bail from a 12.2 million bales net long position, which let the large trade short of around 20 million bales off the hook.
The market is screaming, I’m hungry. Feed me! It’s the time of year when we typically write about the Dog Days of Summer, mid-August, blistering hot, muggy, and simply uncomfortable, day after day. Cotton, loving that kind of weather, is adding weight to its heavy fruit load and the market can’t decide in which direction to move, but it is typically reluctant to move higher. Oh! Also, prices seem to be in the 70’s.
ICE cotton futures steadied on Wednesday after soaring to a more than seven-year peak in the previous session, as traders reassessed crop conditions in the wake of a storm that brought rain to some key cotton-growing regions.
The cotton market settled mixed Wednesday, with December slightly lower, but the deferred contracts somewhat higher. However, there was a wide, 2-cent range for the December contract. Traders are trying to place Tuesday’s nine-year-high rally into some sort of market perspective. That is, the basic fundamentals of supply-demand are such the market could easily top or renew the upside.
The overnight hurdling of the Trump tariff high of 94.82 cents sparked additional speculative buying Tuesday. Moreover, fixation buying was done by certain textile mills as well. The end result was December cotton traded at 96.71 cents, a near nine-year high. However, by session’s end, the ICE futures had coughed up a sizable portion of their earlier gains.
Cotton gains as traders weigh tropical storm’s supply impact
ICE cotton futures were close to their contract highs on Monday as traders assessed the impact on supply from Tropical Strom Fred that is predicted to bring rain to some key-cotton growing regions.
The cotton market traded up, down, and all around on Monday, before eventually finishing slightly lower. Traders had one eye on Tropical Storm Fred, and the other on the tragic situation unfolding in Afghanistan.
To the former, Fred is intensifying as it prepares to make landfall in the Florida Panhandle and scoot up into Alabama. However, a fair portion of its rains will fall over the Georgia crop as well.
ROSE ON COTTON – DEC COTTON MAKES NEW CONTRACT HIGHS ON UNEXPECTED WASDE REVISIONS
Aug 14, 2021
The ICE Dec cotton contract gained 262 points on the week to finish at 94.32, with the Dec – Mar spread inversion strengthened to 113. We did not recommend trading any bias for the week due to the Aug WASDE release on Thursday.Futures moved higher on the week on unexpectedly strong US export sales data and on much tighter than anticipated balance sheets within the Aug WASDE report.
Market Movement from 07th Aug 2021 to 14th Aug 2021
• After last week's consolidation, NY December saw another bullish week gaining 262 points during the weekly and closing at 94.32 cents per pound a new lifetime high of the contract.
ICE Cotton forges ahead, set for best week in over 2 months on WASDE boost
ICE cotton futures on Friday moved to a contract high on momentum from the U.S. Department of Agriculture (USDA) cutting its production estimates, which put prices on track for their best week since early June.
DECEMBER FUTURES FINISH WEEK AT 94.32 CENTS PER POUND
• Stock Markets Form Fresh All-Time Highs • Incoming Marketing Year Starts Out with a Bang • USDA Lowers U.S. Production Estimate • Tropical Weather Grows More Active
The market continues to push higher on speculative buying and now possibly some upside protection buying by trade shorts as well.
Unfixed on-call sales continued to rise and were at 14.23 million bales last week, or nearly ten million bales higher than unfixed purchases. This continues to add fuel to an already fiery market!
In this month’s 2021/22 U.S. cotton projections, beginning stocks are slightly larger, and a 536,000-bale decrease in production results in lower exports and ending stocks. Beginning stocks are larger as estimated exports for 2020/21 are reduced 50,000 bales based on final Export Sales data and Census Bureau data through June. NASS’s first survey-based estimate of production for 2021/22 is 17.3 million bales.
The cotton market was sharply higher Thursday as traders were not expecting USDA’s reduction in its August crop update. Last month’s cotton crop was pegged at 17.80 mb, while expectations for day’s report centered on 18.38 million bales. The actual number was 17.26 million, a 540,000-bale cut.
ICE cotton futures on Wednesday let up from contract highs as investors positioned themselves a day ahead of a key federal monthly supply and demand report.
The cotton market was triple digits lower Wednesday as traders adjusted their positions for Thursday USDA reports. The first release will be the weekly export sales, followed by USDA’s WASDE..
The cotton market closed sharply higher Tuesday, as traders are awaiting Thursday’s WASDE, while also watching the tropical event down in the Gulf of Mexico. For the report, traders are anticipating a higher yielding crop from USDA. Texas is enjoying one of its highest good-to-excellent ratings in years. In fact, the nation’s crop is rated 18% above the ten-year average. Global exports are expected to slightly rise.
As prices fell below 90 cents following the previous Friday’s correction, we began last week uncertain as to the direction the market would take. Rather than
see this extended, our hope was traders would steady themselves while awaiting USDA supply/demand numbers.
ROSE ON COTTON – DEC COTTON FINISHES SIGNIFICANTLY HIGHER AHEAD OF AUG WASDE RELEASE
Aug 08, 2021
The ICE Dec cotton contract gained 231 points on the week to finish at 91.70, with the Dec – Mar inversion strengthening modestly to 37. The market closed an overhead gap on the continuation chart last week. Last weekend, our proprietary model (timely results provided in our complete weekly report) predicted a finish that would be near unchanged to higher Vs the previous Friday’s settlement, which proved to be correct.
Market Movement from 02nd Aug 2021 to 07th Aug 2021
• This week was consolidation week for NY future. December NY future steadily rose during the week. Slowly and steadily it crossed and closed above 91 cents. A signal of consolidation.
Cleveland on Cotton: Lagging Exports Not a Sign of Weak Demand
August 6, 2021
The cotton market has now bulled through 90 and 91 cents and set the stage for a challenge of 93 cents. However, that barrier most likely will not fall until the September world supply demand report is released with USDA’s first objective crop estimate. Granted, Mother Nature can continue with her efforts to further trip-up this crop.
The cotton market nearly traded the 92-cent level as it posted another round of new contract highs. The market is being driven by a sturdy bullish trend and hopes global demand will improve. There are fears rising from the COVID-19 delta variant may cause economic disruptions, but as the world becomes more vaccinated, the global economy should improve.
The chart still looks constructive and spec longs have no reason to exit positions, while trade shorts are getting a bit more nervous as we head into the peak hurricane season.
Therefore, as long as the outcome of the major Northern Hemisphere crops remains in limbo, the market should remain well supported, with the possibility to spike higher in case something were to go wrong on the weather front.
DEC COTTON POSTS SECOND CONSECUTIVE 27-POINT WEEKLY SETBACK
Aug 02, 2021
The ICE Dec cotton contract gave back another 27 points last week to finish at 89.39, with the Dec – Mar spread inversion weakening modestly at 32. Dec managed to settle above the 90.00 level multiple times last week but finish the week above the mark. Last weekend, our proprietary model (timely results provided in our complete weekly report) predicted a finish that would be near unchanged to higher Vs the previous Friday’s settlement, which proved to be correct.
As you recall, we said December futures needed a close above 90 cents to further ignite this advance. Last week, it did just that trading as high as 91 cents while hitting a settlement high of 90.56. Even though Friday brought a slight selloff, consider this healthy and in keeping with the orderly trading fashion this market has followed for months.
Market Movement from 26th Jul 2021 to 31st Jul 2021
• Market remained steady during the week but NY December contract first time crossed 91 Cents barrier in intraday trading. Although NY December closed with some minor weekly loss, technically picture looks sound.
• U.S. Export Sales for current year was almost nil. Now only one week remained for current year. Shipment was 2,47,000 Bales.
• Fed Announced Interest Rates Will Remain Unchanged • Sunday, August 1 Marks Start of New Marketing Year • More Rain and Heat Needed • August WASDE on the Horizon
A positive spin on things first. This appears to be shaping up as one of those rare and blessed years where most producers will enjoy both a good crop and a good price. It doesn’t happen often. Prices (new crop Dec futures) have moved to the 87 to 88 cents area 4 times since the beginning of 2021. This most recent move has now carried us to new highs at better than 90 cents.
Cotton prices surged higher on the week climbing to an even 91 cents before succumbing to Friday’s selloff across all markets: financials, commodities, and equities. Weekly export sales were weak, and the outside markets suffered at week’s end. Nevertheless, the market showed strength between 90 and 91 cents as textile mills were forced to come to the board and fix prices.
Speculators continue to throw money at the long side, but scale-up trade selling is keeping the advance in check so far. As long as crops around the globe continue to perform well, it will be difficult to generate much upside momentum.
Strike up the band! After months of knocking on the door, the market finally broached 90 cents trading as high as 90.59 before falling back to close the week at 89.66. Nonetheless, the week was not without some nervous moments.
December futures traded in a wide 424-point range including a significant selloff of 322 points on Monday to a low of 86.35. Impressive, however, was the way it rebounded finishing the week strong.
December cotton flirted and teased 90 cents all week and the nearby October contract did settle above 90 cents. Demand continues to be the big engine pulling prices higher. Mill demand is strong across the board; China, Vietnam (limited Chinese coronavirus issues), Turkey, India, and across Southeast Asia. Consumer demand is especially strong in the big markets of the U.S. and Western Europe, and actually around the world.
Market Movement from 19th Jul 2021 to 24th Jul 2021
• A highly volatile week on NY future. This week started week with 300 points loss and recovered in next 3 days in December contract. NY December posted contract high of 90.57 intraday and closing high of 89.86 on Thursday. With volatility, open interest is rising so speculator again active. NY December closed with small weekly loss of 27 points.
• December Futures Hit Life-of-Contract High at 90.59 cents • Treasury Notes Continue to Weaken • Next Marketing Year Sales Pick Up Steam • 60% of U.S. Crop Now “Good” or “Excellent”
This week has shown that the market has a lot of underlying support, as Monday’s wash-out was met by ready trade buying. The massive amount of unfixed on-call sales, a strong Chinese market, inflation expectations and still uncertain crop outcomes are discouraging potential short selling.
Short of being caught on the dark side of the moon, it was difficult to miss last week’s market excitement. December cotton futures rallied for over a two-cent gain on the week. Of course, this was no major feat as it has been equaled many times before. However, it was a milestone because it broke long-standing resistance at 89 cents setting both a contract record close and intraday settlement high of 89.93 and 89.95, respectively.
COTTON MARKET POSTS SIGNIFICANT GAINS, POST JULY WASDE RELEASE
Jul 18, 2021
The ICE Dec cotton contract gained 222 points on the week to finish at 89.93, with the Dec – Mar inversion strengthened at 63. Dec made two serious runs at the 90.00 level during late-week trading. Last weekend, our proprietary model (timely results provided in our complete weekly report) predicted a finish that would be near unchanged to higher Vs the previous Friday’s settlement, which proved to be correct.
Prices continue to show strength. New crop December futures closed today at 88.16 cents—the highest in a month and topping 88 cents for the third time near the contract high.
Cotton’s path seems on more solid footing in recent weeks. Given the present fundamentals, the market has clearly established a current objective top at near 90 cents. It looks like there’s currently plenty of support at 84.
The U.S. 2021/22 cotton projections show higher production, exports, and ending stocks compared with last month. While the June 30 Acreage report shows 300,000 fewer planted acres for U.S. cotton than NASS’s previous survey, a rainfall-driven reduction in projected Texas abandonment means U.S. harvested area is projected 9 percent higher. While 2021/22 production is 800,000 bales higher, consumption is unchanged, and exports and ending stocks are each projected 400,000 bales higher.
A mighty sledgehammer came down and struck the agricultural markets this week. Cotton, losing nearly 400 points at one time, performed significantly better than the oilseed and grain markets. Cotton reclaimed much of its loss by the week’s end as the new crop December contract returned to mid-85 cent level. Thus, the technical objective of an 88-93 cent trading range is back in vogue.
Production, Consumption and Trade are Expected to Increase in 2021/22
For the current season, the global production estimate for 2020/21 has been reduced to 24.3 million tonnes this month with smaller crop estimates expected for India, Brazil, and the United States. For India, the latest meeting of the Committee on Cotton Production and Consumption (COCPC) reported production for 2020/21 at 6.12 million tonnes. With the country under crisis from a second wave of COVID-19, mill-use has been revised down to 5.15 million tonnes.
Procurement operations of seed cotton (Kapas) under MSP are going on smoothly in the States of Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Odisha and Karnataka. Till 23.03.2021 a quantity of 91,86,803 cotton bales valuing Rs.26,719.51 Crore has been procured benefitting 18,86,498 farmers.
All international benchmark prices increased over the past month.
The NY December futures contract climbed from 67 to as high as 72 cents/lb near the end of October. More recently, prices eased back to 70 cents/lb. Cotlook’s A Index rose from 73 to 76 cents/lb over the past month.
Changes in Supply and Demand Estimates (from 17 August 2020)
Limited Cotton Recovery within Pandemic: Production and Stock Levels High, Slow Consumption Growth
Even as the most stringent containment measures begin to be lifted, the opportunity for economic recovery may not relieve current market uncertainty. Countries vary in their ability to flatten the contagion curve and the fiscal space to mitigate the pandemic associated recession.
Movement in benchmark prices was mixed over the past month.
The NY December futures contract moved lower (to below 60 cents/lb in late July) and then higher (near 65 cents/lb in early August) over the past month. Current values (63 cents/lb) are nearly even with those from one month ago.
A cyclonic circulation is over East Uttar Pradesh and adjoining area. Another cyclonic circulation is over Central Pakistan. A trough is extending from central Pakistan to Bangladesh across Rajasthan, South Uttar Pradesh, Jharkhand and West Bengal in lower levels. A cyclonic circulation is over central parts of Assam. A cyclonic circulation is over south Konkan. A shear zone is extending from this cyclonic circulation to Chhattisgarh across North Interior Karnataka and Telangana.
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.
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%.
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.
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.
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.
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.
