Sterling Terrell

Prices eased and then exploded lower this week as export sales fell and certified stocks climbed yet again.  With 10 days till expiration, July open interest has fallen to 2,347 contracts. Open interest for December stands at 119,052.  Conditions Report stated 53% of crop is good to excellent, compared to 51% last week, and 43% last year.  Staying the same as last week, 12% of crop is poor to very poor, compared to 23% last year.  Managed money is net long.  Possible resistance at 72.50.

July ended the week at:  80.73

December ended the week at:  74.73

ICE Certified Cotton Stocks = 448798

US Net Export Sales of 24,100 RB for 2014/2015 were reported (Honduras was the big buyer at 10,000RB).

Beginning Stocks: 99.0 (million 480 lb. bales)

Production: 115.9

Supply: 214.9

Mill Use:  112.3

Ending Stocks:  102.7

Stocks/Use Ratio:  91.5%

Beginning Stocks:  2.7 (million 480 lb. bales)

Production: 15.0

Supply:  17.7

Mill Use:  3.7

Ending Stocks: 4.3

Stocks/Use Ratio:  32.1%

                                                                   Long            Short

Producer / Merchant:                                  12,699          84,091 (contracts)

Swap Dealers:                                            56,115          6,375

Managed Money:                                        44,117         16,543

Other:                                                        14,602          21,601

Bearish

What is there to say this week?  The week ended up a bit lower with July explosively kicking towards its last few weeks of life. That was just a beautiful little short squeeze this week in July, wasn’t it?  July open interest has fallen to 7,762 contracts with open interest for December up to 123,938.  The July-Dec spread is back up to 1100 points.  Planting report showed 95% complete, compared to 83% last week. Cotton conditions report showed 51% as good or excellent, compared to 50% last week, and 42% last year.  We are not there quite yet but maybe look for a price bounce or consolidation as we move closer to the cost of production.  Managed money is net long.  Possible resistance at 76.00.

July ended the week at:  88.16

December ended the week at:  77.08

ICE Certified Cotton Stocks = 427,727

US Net Export Sales of 103,300 RB for 2014/2015 were reported (Indonesia was the big buyer).

Beginning Stocks: 99.0 (million 480 lb. bales)

Production: 115.9

Supply: 214.9

Mill Use:  112.3

Ending Stocks:  102.7

Stocks/Use Ratio:  91.5%

Beginning Stocks:  2.7 (million 480 lb. bales)

Production: 15.0

Supply:  17.7

Mill Use:  3.7

Ending Stocks: 4.3

Stocks/Use Ratio:  32.1%

                                                                   Long            Short

Producer / Merchant:                                  28,899          102,410 (contracts)

Swap Dealers:                                            55,527         4,068

Managed Money:                                        46,590         18,000

Other:                                                        14,203         21,487

Bearish to Neutral