Price Picture
Chart Source: barchart.com
Notes
Nearby contract closed 162 points lower this week.
Managed money is net short.
Short-term, technical traders see possible support around 58.00, possible resistance around 60.00.
The trend is down.
Managed money is net short.
Short-term, technical traders see possible support around 58.00, possible resistance around 60.00.
The trend is down.
Price
March-16 is at: 58.90 Volume = 21,279
May-16 is at: 58.64 Volume = 20,847
July-16 is at: 59.07 Volume = 3,330
Cotlook ‘A’ Index is at: 66.00
July-16 is at: 59.07 Volume = 3,330
Cotlook ‘A’ Index is at: 66.00
Cash Sales
Most recently, on 8,885 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 54.57.
On March, that puts the average basis at approximately: –433 points.
Cash prices are averaging approximately 8.59 cents over loan value.
Stocks and Sales
ICE Certified Cotton Stocks = 32,629
US Net Upland Export Sales (2015/2016) = 227700
(Turkey was the big buyer at 63,500.)
Current World Balance Sheet (2015/2016)
Beginning Stocks: 112.17 (million 480 lb. bales)
Production: 101.38
Supply: 213.55
Mill Use: 110.60
Ending Stocks: 104.08
Ending Stocks/Mill Use Ratio: 94.1%
Current China Balance Sheet (2015/2016)
Beginning Stocks: 67.92 (million 480 lb. bales)
Production: 23.80
Imports – Exports: 4.8
Imports – Exports: 4.8
Supply: 96.52
Mill Use: 32.00
Ending Stocks: 64.52
Ending Stocks/Mill Use Ratio: 201.6%
Current India Balance Sheet (2015/2016)
Beginning Stocks: 13.49 (million 480 lb. bales)
Production: 27.80
Imports – Exports: –4.8
Imports – Exports: –4.8
Supply: 36.49
Mill Use: 24.50
Ending Stocks: 11.99
Ending Stocks/Mill Use Ratio: 48.9%
Current USA Balance Sheet (2015/2016)
Beginning Stocks: 3.7 (million 480 lb. bales)
Production: 12.94
Imports – Exports: –9.49
Imports – Exports: –9.49
Supply: 7.15
Mill Use: 3.60
Ending Stocks: 3.60
Ending Stocks/Mill Use Ratio: 100.0%
Commitments of Traders
Producer / Merchant
- Long: 29,201 (Contracts)
- Short: 82,607
Swap Dealers
- Long: 52,059
- Short: 5,804
Managed Money
- Long: 43,813
- Short: 45,934
Other Reportables
- Long: 34,884
- Short: 23,045
Dec. Cotton Price Model: 54.9 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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