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You are here: Home / Not Books / The Cotton Club Letter – For Week Ending 7/22/2016

The Cotton Club Letter – For Week Ending 7/22/2016

The Cotton Club Letter – For Week Ending 7/22/2016

  Price Picture

Chart Source: Barchart.com

 
Trend Picture

Chart Source: Barchart.com
 
Notes
Nearby contract closed 160 points lower this week.
Managed money is net long.
Short-term, technical traders see possible support around 72.00, possible resistance around 73.60.
The trend is up.

Price
Dec-16 is at:   72.68        Volume = 17,855
Mar-17 is at:   73.32        Volume = 4,565
May-17 is at:  73.29         Volume = 99
Cotlook ‘A’ Index is at: 83.85 

Cash Sales
Recently, on 726 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 64.66.
On the nearby contract, that puts the average basis at approximately: -8.02 points.
Cash prices are averaging approximately 13.33 cents over loan value.
 

Stocks and Sales
ICE Certified Cotton Stocks = 120,078
US Net Upland Export Sales (2015/2016) = 71,100
     Vietnam was the big buyer at 26,600.
 

Current World Balance Sheet (2016/2017)
Beginning Stocks: 100.27 (million 480 lb. bales)
Production: 102.55
Supply: 202.82
Mill Use: 111.60
Ending Stocks: 91.29
Ending Stocks/Mill Use Ratio: 81.8% 

Current China Balance Sheet (2016/2017)
Beginning Stocks: 60.80 (million 480 lb. bales)
Production: 21.50
Imports – Exports: 4.4
Supply: 86.70
Mill Use: 35.00
Ending Stocks: 51.70
Ending Stocks/Mill Use Ratio: 147.7%

Current India Balance Sheet (2016/2017)

Beginning Stocks: 11.19 (million 480 lb. bales)
Production: 27.50
Imports – Exports: -3.25
Supply: 35.44
Mill Use: 24.00
Ending Stocks: 11.44
Ending Stocks/Mill Use Ratio: 47.7%

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.9 (million 480 lb. bales)
Production: 15.80
Imports – Exports: -11.49Supply: 8.21
Mill Use: 3.60
Ending Stocks: 4.60
Ending Stocks/Mill Use Ratio: 127.8%

 
Commitments of Traders
Producer / Merchant
    Long:  18,416  (Contracts)
    Short: 156,971
Swap Dealers
    Long:  61,232
    Short:  11,165
Managed Money
    Long:  85,610
    Short:  20,764
Other Reportables
    Long:  32,997
    Short:  21,300 

Cotton Club Letter Price Model:  Subscription Only
A regression model, like the one located here 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: X cents.”

*Note – This model does not attempt to forecast the future 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. 

Click Here to Read: “10 Points on the ICE Cotton #2 Chart(CT) – Week Ending 7/22/2016“ 

====================

The Cotton Club Letter Archive can be found by clicking, here.

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Filed Under: Not BooksTagged With: #TheCottonClubLetter

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