Cotton

Cotcorp quotes (9:43 GMT 15th Feb, 2008)
US sales reported in Indonesia (8:57 GMT 15th Feb, 2008)
ZCE rallies again (8:56 GMT 15th Feb, 2008)
China Cotton Index higher (8:29 GMT 15th Feb, 2008)
CNCE settles firm (5:54 GMT 15th Feb, 2008)
Sales increase on The Seam (23:03 GMT 14th Feb, 2008)
New York futures higher at close (20:04 GMT 14th Feb, 2008)
Cotton futures limit up at midday (17:32 GMT 14th Feb, 2008)
Open, dry weather reported across US cotton belt (14:23 GMT 14th Feb, 2008)
US Export Sales - in detail (14:12 GMT 14th Feb, 2008)
US Export Sales - in brief (14:01 GMT 14th Feb, 2008)

Top Stories


Cotton lint firm in west India
Mumbai - Cotton lint was trading steady amid declined arrivals and slow demand from millers at the spot markets across western India Friday. A trader says, exporters have stopped buying while demand survives.

15/02 15:14 Cotton lint up on millers' demand

15/02 10:17 Cotton futures gain on buying

15/02 09:35 ICE March cotton sees limit gains

15/02 09:06 Kapas NCDEX April

NYBOT Cotton #2

Month
Click for chart Session Pr.Day Options
Open High Low Last Time Sett Chg Vol Sett OpInt
Mar 08 67.65 69.91 67.65 69.91 Feb 14, 14:43 69.91 3.00 16992 66.91 63486 Call Put
May 08 69.20 71.64 69.20 70.71 Feb 14, 14:43 70.71 2.07 14955 68.64 92229 Call Put
Jul 08 72.95 72.95 72.49 72.49 Feb 14, 14:43 72.49 2.06 2082 70.43 34543 Call Put
Oct 08 75.10 75.10 75.10 75.10 Feb 14, 14:43 75.10 1.90 2 73.20 1920 Call Put
Dec 08 75.95 78.34 75.95 77.03 Feb 14, 14:43 77.03 1.69 2029 75.34 70881 Call Put
Mar 09 79.30 79.40 79.10 79.40 Feb 14, 14:43 79.40 1.60 140 77.80 3388 Call Put
May 09 81.00 81.00 80.50 80.50 Feb 14, 14:43 80.50 1.70 38 78.80 304 Call Put
Jul 09 81.50 81.50 81.50 81.50 Feb 14, 14:43 81.50 1.70 64 79.80 368 Call Put
Oct 09 82.00 82.00 82.00 82.00 Feb 14, 14:43 82.00 1.85 2 80.15 2 Call Put
Dec 09 82.00 82.00 82.00 82.00 Feb 14, 14:43 82.00 1.38 85 80.62 1455 Call Put
Mar 10 83.60 83.60 83.60 83.60 Feb 14, 14:43 83.60 1.40 16 82.20 50 Call Put
May 10 84.30 84.30 84.30 84.30 Feb 14, 14:43 84.30 1.55 - 82.75 - Call Put
Jul 10 85.30 85.30 85.30 85.30 Feb 14, 14:43 85.30 1.55 6 83.75 1325 Call Put
Oct 10 85.35 85.35 85.35 85.35 Feb 14, 14:43 85.35 1.35 - 84.00 5 Call Put
Dec 10 86.35 86.35 86.35 86.35 Feb 14, 14:43 86.35 1.35 - 85.00 9 Call Put

Febuary 15, 2008

By: O.A. Cleveland, Ph.D. | Biography

Tell me the direction of the oilseed/grains markets and I can rather accurately predict the cotton market. The story line continues…the cotton market is having great difficulty following its own fundamentals, following instead the grain and oilseed complex. While the New York market is focusing, to some degree on 2009 planted acreage, the fact that increasing carryover stocks in the world’s major exporting countries has failed hold prices down but only for brief periods. Cotton fundamentals attempt to pull the legs out from under the 70 cent level, only to find that concerns over grain and oilseed supplies push cotton prices back up. We have, on many occasions, cautioned you about how volatile the market has become. Too, there in nothing on the horizon that offers any let up in that situation.

At the week’s risk management seminar sponsored by Cotton Incorporated, I cautioned growers not only about the continued bullish price environment created by the ethanol situation, but also the growing potential global vegetable oil crisis. I had first made that observation at the Certified FiberMax Quality Seminar for Chinese textile mills in October 2007. The New York December was the spot futures month at the time and I offered that 63 cents, basis December, would be low mark for the remainder of the contract, and it was. The next suggestion was that the March contract would not see anything below 67 cent—we now know it did go to 66 cents. I am now of the opinion that 69 cents will be the low in May once it becomes the spot trading month is just a few days.

Price bubbles always burst, and the current one led by the grain/oilseed complex will be no exception. There are millions, hundreds of millions of acres in fact, in Europe, Central Asia, Africa, South America and even the U.S. (remember the CRP acres) that can be cropped if prices ratios demand that acreage. We do not have a land shortage. However, we cannot bring the needed land area into production is the short term. Thus, the price bubble will only grow larger in the near term. The false demand for ethanol, created by U.S. legislation, started the higher price ball rolling. However, it is the potential food shortage, created by record low vegetable oil stocks (in terms of per capita consumption) that will increase the life cycle of the current grain/oilseed led price bubble. Should the global vegetable oil crisis become more exaggerated, the price bubble for agricultural row crops could extend as far out as 2011-2012.

Too, because of the competition for land area, that bubble will also lead to higher cotton prices. Likely, the market top will be in 2010. Yet, in the interim, cotton will remain historically volatile…as it gradually works its way toward higher and higher prices.

The speculative community, specifically the large hedge funds and index funds, will increase their long positions in the cotton market. While the hedge funds can and will be quick to take profits from time to time, momentarily pulling the legs from under prices. However, the index funds will maintain their longs and hedge funds will again take new long market positions in cotton.

The growing concern regarding the lack of subsoil moisture in Texas—they still have another six weeks or so--will also add to market support. It is, nevertheless, very doubtful that Texas can begin the cotton growing season with even as much as 50% of the level of last season. Thus, U.S. production, expected to range between 14.0 and 15.0 million bales, and will likely be on the very low side of that range. U.S. stocks could well slip as low as 3.5 million bales, and likely no more than 4.0 million. The December New York contract will touch 80 cents and the December contract should see ten cents higher.

Cotton farmers from Vidarbha to visit TN

Commodity Online
COIMBATORE: In an effort to build confidence among farmers, a group of cotton growers from the Vidarbha region in Maharahstra, which has reported high incidents of farmers’ suicides, will be touring western Tamil Nadu, including Coimbatore and adjoining districts.

The Vidarbha farmers would be taken around on their visits to different farming areas and would also be interacting with farmers in this region.

The visit has been organised under the aegis of the South India Cotton Association (SICA), a regional cotton body, and Super Spinning Mills Ltd, an integrated textile company.

The visit has been organised as part of a campaign to build confidence in the minds of the Maharashtra’s farming community.

Dr M S Swaminathan Research Foundation, which has set up rehabilitation centres in various districts of Maharashtra as supportive programmes for the farmers, is coordinating the farmers’ visit, according to a press note from SICA.

The SICA release added that a seminar on crop management and an interactive session with the Maharashtra farmers would be held here on Fenruary 20.

Cotlook headlines:

Cotcorp quotes (12:54 GMT 18th Feb, 2008)
China Cotton Index higher (8:42 GMT 18th Feb, 2008)
ZCE modestly higher (8:04 GMT 18th Feb, 2008)
China’s monthly textile exports (7:25 GMT 18th Feb, 2008)
CNCE softer (3:41 GMT 18th Feb, 2008)
China’s cotton imports lower in January (2:52 GMT 18th Feb, 2008)
Egyptian sales registrations continue to rise (16:43 GMT 17th Feb, 2008)
Activity drops on The Seam (22:43 GMT 15th Feb, 2008)
Cotton futures settle lower in record New York session (20:29 GMT 15th Feb, 2008)
Futures under pressure in midday New York cotton trade (17:33 GMT 15th Feb, 2008)
Storms forecast for much of Texas and Southern US through weekend (15:13 GMT 15th Feb, 2008)

Top Stories


India's 2007 Bt cotton area jumps 63pc
New Delhi - India's area under Bt cotton rose by around 63 per cent in 2007 to 62 lakh hectares, because higher yield and a reduced need for insecticide spurred more farmers to grow the crop.

18/02 17:10 Cotton futures end in red

18/02 16:18 Cotton lint mixed in west India

18/02 15:17 Cotton lint surges in north India

18/02 10:14 Cotton futures mixed at open

Cotton production may reach 12 million bales
ASMA RAZAQ
ISLAMABAD (February 21 2008): Cotton production may reach 12 million bales in the fiscal year 2007-08, official sources in the Ministry of Food (Minfal) told Business Recorder on Wednesday. The government had earlier roughly estimated production of 11.6 million bales but now the arrivals of the cotton in the ginning factories indicate that the output may not be less than 12 million bales this season.

Phutti arrivals at ginning factories usually end in the first week of March, but as there is delay in the third picking, the arrivals are expected to continue up to the end of March. "Third picking of cotton has been delayed by the farmers just to increase the price as the farmers have borne high cost of production per acre than ever before", officials said.

They said that cotton arrivals from Sindh have been 8 percent higher than last year. Last year, these were 2.2 million bales while this year 2.4 million bales have already arrived in the ginneries in Sindh, they added.

In Punjab, cotton arrivals at the ginning factories have depicted a downward trend. "This year so far 8.1 million bales have arrived in Punjab, whereas these amounted to 9.6 million bales last year. This clearly shows a decline of 15 percent. But it is just because of the delay in third picking and the government is expecting that till the end of March, the crop arrivals in Punjab would be more than last year", officials said.

Cotton futures add more gains
Mumbai - Stretching gains of the previous session, cotton moved up sharply amid continued buying by traders during initial hours of trade on both the domestic exchanges Thursday. While NCDEX April c...

21/02 08:26 Kapas Khali NCDEX MARCH

21/02 08:25 Kapas NCDEX April

21/02 10:07 ICE cotton rallies late on energies

20/02 10:25 ICE cotton rises in commodity strength