Price Picture
Notes
ICE cotton dollar prices for July-15 closed around 20 points higher this week as prices finished at 65.22. The Dec-15 contract finished at 65.85. Open interest for July-15 is at 31,697 contracts. Dec-15 open interest is at 29,454. U.S. certified cotton stocks equaled 8,111 while U.S. net export sales were at 71,400 RB. Managed money is net long. Short-term, technical traders see possible support around 64.00 with possible resistance around 66.20. The long-term trend is up.
Price
July-15 is at: 65.22
Dec-15 is at: 65.85
Cotlook ‘A’ Index is at: 71.75
July-15 is at: 65.22
Dec-15 is at: 65.85
Cotlook ‘A’ Index is at: 71.75
Cash Sales
For 2/27/2015, the trading platform TheSeam.com reported an average cash price of: 50.28.
On July, that puts the average basis right at: -1494 points.
Cash prices are averaging 6.38 cents over loan value.
For 2/27/2015, the trading platform TheSeam.com reported an average cash price of: 50.28.
On July, that puts the average basis right at: -1494 points.
Cash prices are averaging 6.38 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 8,111
US Net Upland Export Sales = 71,400
(China was the big buyer at 17,300.)
Current World Balance Sheet (2014/2015)
(China was the big buyer at 17,300.)
Current World Balance Sheet (2014/2015)
Beginning Stocks: 101.66 (million 480 lb. bales)
Production: 119.37
Supply: 221.03
Mill Use: 111.25
Ending Stocks: 109.84
Ending Stocks/Mill Use Ratio: 98.73%
Current China Balance Sheet (2014/2015)
Current China Balance Sheet (2014/2015)
Beginning Stocks: 62.71 (million 480 lb. bales)
Production: 30.00
Imports – Exports: 7.25
Imports – Exports: 7.25
Supply: 99.96
Mill Use: 35.50
Ending Stocks: 64.46
Ending Stocks/Mill Use Ratio: 181.58%
Current India Balance Sheet (2014/2015)
Current India Balance Sheet (2014/2015)
Beginning Stocks: 11.52 (million 480 lb. bales)
Production: 30.50
Imports – Exports: -3.10
Imports – Exports: -3.10
Supply: 38.92
Mill Use: 24.00
Ending Stocks: 14.92
Ending Stocks/Mill Use Ratio: 62.16%
Current USA Balance Sheet (2014/2015)
Beginning Stocks: 2.45 (million 480 lb. bales)
Beginning Stocks: 2.45 (million 480 lb. bales)
Production: 16.08
Imports – Exports: -10.69
Imports – Exports: -10.69
Supply: 7.84
Mill Use: 3.65
Ending Stocks: 4.2
Ending Stocks/Mill Use Ratio: 115.07%
Commitments of Traders
Producer / Merchant
Producer / Merchant
- Long: 18,535 (Contracts)
- Short: 116,801
Swap Dealers
- Long: 49,276
- Short: 4,534
Managed Money
- Long: 65,934
- Short: 20,219
Other Reportables
- Long: 17,773
- Short: 16,911
Cotton Price Model: 74 cents
A regression model, like the one below can give insight into how prices, on average, would react given a change in one or more fundamental supply or demand factors. A proper interpretation of this price model would be:
“Over the last number of years, if cotton supply and demand were at their current levels, we would – on average – expect the US price of cotton to be approximately: 74 cents.”
(*Note: This model does not attempt to forecast the direction or level of cotton prices.)
(*Note: This model does not attempt to forecast the direction or level of cotton prices.)
General View
Bullish.
(Keep in mind that while this is a weekly letter, I can easily change my mind in 24 hours.)
This letter archive can be found by clicking, here.
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*This is for informational purposes only, and not a recommendation to buy or sell.
*This is for informational purposes only, and not a recommendation to buy or sell.
There is substantial risk of loss to futures and options trading.
Past performance may not be indicative of future results.
One should carefully consider their financial suitability prior to trading futures or options.
