Notes
Nearby contract closed approximately 309 points lower this week.
Managed money is net long.
Short-term, technical traders see possible support around 72.00, possible resistance around 73.00.
The trend is up.
Price
Mar-17 is at: 72.27 Volume = 11,966
May-17 is at: 72.76 Volume = 6,662
July-17 is at: 73.27 Volume = 3,378
Cotlook ‘A’ Index is at: 82.25
Cash Sales
Recently, on 2,118 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 66.34.
On the nearby contract, that puts the average basis at approximately: –456 points.
Cash prices are averaging approximately 14.73 cents over loan value.Stocks and Sales
ICE Certified Cotton Stocks = 109,313
US Net Upland Export Sales (2016/2017) = 236,000
Vietnam was the big buyer at 74,100.
Current World Balance Sheet (2016/2017)
Beginning Stocks: 96.89 (million 480 lb. bales)
Production: 105.34
Mill Use: 111.76
Ending Stocks: 90.65
Ending Stocks/Mill Use Ratio: 81.1%
Current China Balance Sheet (2016/2017)
Beginning Stocks: 58.20 (million 480 lb. bales)
Production: 22.00
Mill Use: 36.25
Ending Stocks: 48.35
Ending Stocks/Mill Use Ratio: 133.4%
Current India Balance Sheet (2016/2017)
Beginning Stocks: 10.94 (million 480 lb. bales)
Production: 27.00
Mill Use: 23.25
Ending Stocks: 12.09
Ending Stocks/Mill Use Ratio: 52.0%
Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.8 (million 480 lb. bales)
Production: 16.96
Mill Use: 3.30
Ending Stocks: 5.00
Ending Stocks/Mill Use Ratio: 151.5%
Producer / Merchant
Long: 16,455 (Contracts)
Short: 190,571
Swap Dealers
Swap Dealers
Long: 58,472
Short: 13,781
Managed Money
Long: 99,905
Short: 9,612
Other Reportables
Long: 38,914
Short: 11,733
Cotton Club Letter Price Model: Current Price Is Available By 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.
Cotton Club Letter Price Model: Current Price Is Available By 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.
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