Price Picture
Chart Source: Barchart.com
Trend Picture
Chart Source: Barchart.com
Notes
Nearby contract closed 50 points higher this week.
Managed money is net long.
Short-term, technical traders see possible support around 63.00, possible resistance around 66.00.
The trend is up.
Price
July-16 is at: 63.77 Volume = 12,738
July-16 is at: 63.77 Volume = 12,738
Dec-16 is at: 62.72 Volume = 4,069
Mar-17 is at: 62.98 Volume = 289
Mar-17 is at: 62.98 Volume = 289
Cotlook ‘A’ Index is at: 71.70
Cash Sales
Recently, on 81 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 46.14.
On the nearby contract, that puts the average basis at approximately: -1763 points.
Cash prices are averaging approximately 2.53 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 57,746
US Net Upland Export Sales (2015/2016) = 48,700
China was the big buyer at 11,400.
Beginning Stocks: 111.88 (million 480 lb. bales)
Production: 99.80
Supply: 211.68
Mill Use: 109.59
Ending Stocks: 102.22
Ending Stocks/Mill Use Ratio: 93.3%
Current China Balance Sheet (2015/2016)
Beginning Stocks: 67.92 (million 480 lb. bales)
Production: 23.80
Imports – Exports: 4.8
Supply: 96.52
Mill Use: 32.50
Ending Stocks: 64.02
Ending Stocks/Mill Use Ratio: 197.0%
Current India Balance Sheet (2015/2016)
Beginning Stocks: 13.49 (million 480 lb. bales)
Production: 26.80
Imports – Exports: -4.95
Supply: 35.34
Mill Use: 24.50
Ending Stocks: 10.84
Ending Stocks/Mill Use Ratio: 44.2%
Current USA Balance Sheet (2015/2016)
Beginning Stocks: 3.7 (million 480 lb. bales)
Production: 12.87
Imports – Exports: -9.46
Supply: 7.11
Mill Use: 3.60
Ending Stocks: 3.50
Ending Stocks/Mill Use Ratio: 97.2%
Producer / Merchant
Long: 10,168 (Contracts)
Short: 108,265
Swap Dealers
Long: 68,289
Short: 7,204
Managed Money
Long: 57,018
Short: 23,694
Other Reportables
Long: 21,464
Short: 22,020
Cotton Club Letter Price Model: 54.4 cents
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 4/22/2016“
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Past performance may not be indicative of future results.
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