Nearby contract closed 262 points lower this week.
Managed money is net long.
Short-term, technical traders see possible support around 76.00, possible resistance around 74.00.
The trend is up.
Dec-16 is at: 68.03 Volume = 18,249
Mar-17 is at: 68.76 Volume = 4,512
May-17 is at: 68.79 Volume = 395
Cotlook ‘A’ Index is at: 78.40
Recently, on 119 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 63.15
On the nearby contract, that puts the average basis at approximately: –7.50 points.
Cash prices are averaging approximately 14.71 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 65,175
US Net Upland Export Sales (2016/2017) = 205,000
Vietnam was the big buyer at 59,300.
Current World Balance Sheet (2016/2017)
Beginning Stocks: 99.18 (million 480 lb. bales)
Mill Use: 111.26
Ending Stocks: 89.61
Ending Stocks/Mill Use Ratio: 80.5%
Current China Balance Sheet (2016/2017)
Beginning Stocks: 60.30 (million 480 lb. bales)
Imports – Exports: 4.4
Mill Use: 35.00
Ending Stocks: 50.70
Ending Stocks/Mill Use Ratio: 144.9%
Current India Balance Sheet (2016/2017)
Beginning Stocks: 10.86 (million 480 lb. bales)
Imports – Exports: -3.2
Mill Use: 24.00
Ending Stocks: 10.66
Ending Stocks/Mill Use Ratio: 44.4%
Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.9 (million 480 lb. bales)
Imports – Exports: -11.49
Mill Use: 3.60
Ending Stocks: 4.70
Ending Stocks/Mill Use Ratio: 130.5%
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.”
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 8/19/2016“
The Cotton Club Letter Archive can be found by clicking, here.