Attention:
The Cotton Club Letter will, from now on, be available only by email subscription, for $20 per month.
But here is the catch, the window to subscribe will only be open until 10:00 PM, Sunday, the 24th of July.
After that, registration will be closed for at least a few months.
Below is the last complimentary edition.
Subscribers Receive:
– A snapshot of the week’s price action
– An overall view of market trend
– A look at cash and futures prices
– Supply and demand statistics
– Commitments of Traders numbers
– A general opinion of the market
– Access to The Cotton Price Model
With a lag time of one week, the archive will be free to access, and located here.
I look forward to continuing to provide an aggregated examination and opinion of the cotton market on a weekly basis.
To keep up with my other posts, sign up here for free.
Price Picture
Chart Source: Barchart.com
Trend Picture
Chart Source: Barchart.com
Notes
Nearby contract closed 847 points higher this week.
Managed money is net long.
Short-term, technical traders see possible support around 66.00, possible resistance around 75.00.
The trend is up.
Dec-16 is at: 74.28 Volume = 23,862
Mar-17 is at: 74.19 Volume = 3,585
May-17 is at: 73.88 Volume = 450
Mar-17 is at: 74.19 Volume = 3,585
May-17 is at: 73.88 Volume = 450
Cotlook ‘A’ Index is at: 83.85
Cash Sales
Recently, on 1,340 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 67.27.
On the nearby contract, that puts the average basis at approximately: –7.01 points.
Cash prices are averaging approximately 15.04 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 130,071
US Net Upland Export Sales (2015/2016) = 55,200
Indonesia was the big buyer at 16,400.
Beginning Stocks: 100.27 (million 480 lb. bales)
Production: 102.55
Supply: 202.82
Mill Use: 111.60
Ending Stocks: 91.29
Ending Stocks/Mill Use Ratio: 81.8%
Current China Balance Sheet (2016/2017)
Beginning Stocks: 60.80 (million 480 lb. bales)
Production: 21.50
Imports – Exports: 4.4
Supply: 86.70
Mill Use: 35.00
Ending Stocks: 51.70
Ending Stocks/Mill Use Ratio: 147.7%
Current India Balance Sheet (2016/2017)
Beginning Stocks: 11.19 (million 480 lb. bales)
Production: 27.50
Imports – Exports: -3.25
Supply: 35.44
Mill Use: 24.00
Ending Stocks: 11.44
Ending Stocks/Mill Use Ratio: 47.7%
Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.9 (million 480 lb. bales)
Production: 15.80
Imports – Exports: -11.49
Supply: 8.21
Mill Use: 3.60
Ending Stocks: 4.60
Ending Stocks/Mill Use Ratio: 127.8%
Producer / Merchant
Long: 15,390 (Contracts)
Short: 141,513
Swap Dealers
Long: 58,395
Short: 10,345
Managed Money
Long: 72,136
Short: 21,055
Other Reportables
Long: 33,104
Short: 18,437
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.”
*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 7/15/2016“
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The Cotton Club Letter Archive can be found by clicking, here.
*This is for informational purposes only, and not a recommendation to buy or sell.
There is substantial risk of loss to futures and options trading.
Past performance may not be indicative of future results.
One should carefully consider their financial suitability prior to trading futures or options.
