Nearby contract closed 136 points lower this week.
Managed money is net long.
Short-term, technical traders see possible support around 72.60, possible resistance around 74.20.
The trend is up.
Dec-16 is at: 74.04 Volume = 20,400
Mar-17 is at: 73.97 Volume = 3,501
May-17 is at: 73.71 Volume = 387
Cotlook ‘A’ Index is at: 84.85
Cash Sales
Recently, on 242 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 66.80.
Cash prices are averaging approximately 13.87 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 110,652
US Net Upland Export Sales (2015/2016) = 44,600
Vietnam was the big buyer at 28,800.
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%
Swap Dealers
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.”
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 Pointson the ICE Cotton #2 Chart(CT) – Week Ending 7/29/2016“
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The Cotton Club Letter Archive can be found by clicking, here.
