Price Picture
Chart Source: barchart.com
Notes
Nearby contract closed 132 points lower this week.
Managed money is net long.
Short-term, technical traders see possible support around 61.00, possible resistance around 62.50.
The trend is down.
Managed money is net long.
Short-term, technical traders see possible support around 61.00, possible resistance around 62.50.
The trend is down.
Price
March-16 is at: 61.13 Volume = 21,729
May-16 is at: 61.60 Volume = 10,362
July-16 is at: 61.93 Volume = 3,619
Cotlook ‘A’ Index is at: 67.70
July-16 is at: 61.93 Volume = 3,619
Cotlook ‘A’ Index is at: 67.70
Cash Sales
Most recently, on 1,249 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 56.66.
On March, that puts the average basis at approximately: –447 points.
Cash prices are averaging approximately 9.37 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 28,706
US Net Upland Export Sales (2015/2016) = 128,300
(Turkey was the big buyer at 44,500.)
Current World Balance Sheet (2015/2016)
Beginning Stocks: 112.07 (million 480 lb. bales)
Production: 101.56
Supply: 213.63
Mill Use: 110.94
Ending Stocks: 102.86
Ending Stocks/Mill Use Ratio: 92.7%
Current China Balance Sheet (2015/2016)
Beginning Stocks: 67.92 (million 480 lb. bales)
Production: 23.80
Imports – Exports: 5.3
Imports – Exports: 5.3
Supply: 97.02
Mill Use: 32.50
Ending Stocks: 64.52
Ending Stocks/Mill Use Ratio: 198.5%
Current India Balance Sheet (2015/2016)
Beginning Stocks: 13.49 (million 480 lb. bales)
Production: 28.00
Imports – Exports: –4.8
Imports – Exports: –4.8
Supply: 36.69
Mill Use: 25.00
Ending Stocks: 11.69
Ending Stocks/Mill Use Ratio: 46.8%
Current USA Balance Sheet (2015/2016)
Beginning Stocks: 3.7 (million 480 lb. bales)
Production: 12.94
Imports – Exports: –9.99
Imports – Exports: –9.99
Supply: 6.5
Mill Use: 3.60
Ending Stocks: 3.10
Ending Stocks/Mill Use Ratio: 86.1%
Commitments of Traders
Producer / Merchant
- Long: 27,309 (Contracts)
- Short: 99,844
Swap Dealers
- Long: 48,349
- Short: 8,931
Managed Money
- Long: 50,632
- Short: 25,836
Other Reportables
- Long: 29,231
- Short: 18,769
Dec. Cotton Price Model: 58.3 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.
*Note* – This model does not attempt to forecast the future direction or level of cotton prices.
General View
Bearish.
Keep in mind that while this is a weekly letter, I can easily change my mind in 24 hours.
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