Cotton

International cotton prices seen higher in 2008-09: ICAC
3 Jun 2008 10:59 am

New York - World cotton prices are projected higher in 2008-09, due mainly to an expected decline in the stocks-to-mill use rations in the world outside of China, the International Cotton Advisory Committee (ICAC) said in a press release Monday.

ICAC forecasts the season-average Cotlook A Index at 79 cents per pound in 2008-09, 6 cents higher than the expected 2007-08 average of 73 cents.

Global cotton production is expected to decline to 25.9 million tons in 2008-09 from 26.21 million tons in 2007-08, according to the press release. Lower production from the U.S., Brazil and Turkey are expected as a result of competition for acreage from grains and soybeans. These reductions may offset projected higher production in Asia, West Africa and Australia, ICAC said.

World cotton mill use is expected to remain stable at 26.7 million tons in 2008-09 as a result of slower global economic growth and higher prices of cotton relative to polyester, according to the release.

World consumption is projected to exceed production in 2008-09, leaving world ending stocks forecast at 11.3 million tons, down from 12.01 million tons the year before, ICAC said.

Global cotton trade is forecast to increase to 8.8 million tons in 2008-09 from 8.25 million tons in 2007-08 due to expectations for higher imports by China.

Monsoon covers key states in India; progress seen slow
3 Jun 2008 10:13 am

Mumbai - Monsoon rains, crucial for India's summer crop plantings, have covered the entire southern states of Kerala and Tamil Nadu and several states in the northeast, an official of the India Meteorological Department said Monday.

Monsoon rains even covered several parts of the southern state of Andhra Pradesh, which is a major producer of rice.

However, the official, who declined to be named, said further advancement of the monsoon from the southwest coast may be slow over the next two days.

"There may be heavy rains in the northeast but the monsoon system seems to have slightly weakened in the southwest, where further progress may slow down," the official said.

He said there may be only scattered rain or thundershowers over the southern peninsula for the next two days, adding most parts of Rayalaseema, a key rice growing region in Andhra Pradesh, have already been covered by the monsoon.

He also said the northeastern states of Mizoram and Nagaland, which are also primarily rice growing areas, have also been fully covered by monsoon rains.

The monsoon rains entered India's mainland May 31, a day ahead of the normal onset date.

India's June-September monsoon rains are critical for summer-sown crops such as rice, sugarcane, cotton and oilseeds, sowing of which has begun. More than 60% of India's farmlands are rain-fed and depend on monsoon rains for sustenance

ICE cotton slides on fundamentals
3 Jun 2008 10:10 am

New York - ICE Futures US cotton futures settled lower Monday as gains made on spillover gave way to weak technicals and bearish fundamentals.

Market direction is murky as technicals slip to their lowest price points since late August with lacking fundamentals to support the market.

July futures settled 30 points lower at 65.44 cents a pound and the October contract settled down 41 points at 70.75.

Futures opened lower and traded back and forth until latching onto momentum from rising Chicago grains and outside commodities. July ran up to the 66.76 session high then promptly slid to the session low as sell stops were triggered going into the close, said Mike Stevens, analyst at SFS Futures in Mandeville, La.

"Near-term fundamentals have taken over," said Boyd Cruel, senior softs analyst at Alaron Trading in Chicago. Current price levels are near the fair market value for cotton as abundant supply is met by lackluster demand, Cruel said.

Technicals continue to weigh on market direction as futures slipped down to 64.85 basis July. Futures need to develop chart momentum to break out of the lower part of their current trading range, Stevens said.

ICE daily cotton stocks increased by 9,892 480-pound bales Friday to total 1.56 million bales with 56,692 awaiting review. ICE weekly certificated cotton stock totaled 1.55 million bales for the week ending May 30 with 56,692 bales awaiting review.

ICE cotton open interest increased by 3,678 positions Friday to total 273,411, the exchange reported.

Volume was estimated 20,903 lots. In options, approximately 5,984 calls and 4,280 puts traded, according to exchange data.

Cotton lint stable in north India
3 Jun 2008 3:07 pm

Abohar - Spot cotton lint prices remained at the previous level amid sluggish business at major markets across north India Tuesday. The market is lacking buyers at the current higher prices.

Meanwhile, world cotton prices are projected higher in 2008-09, due mainly to an expected decline in the stocks-to-mill use rations in the world outside of China, the International Cotton Advisory Committee (ICAC) said in a press release Monday.

Global cotton production is expected to decline to 25.9 million tons in 2008-09 from 26.21 million tons in 2007-08, according to the press release. World cotton mill use is expected to remain stable at 26.7 million tons in 2008-09 as a result of slower global economic growth and higher prices of cotton relative to polyester, according to the release. World consumption is projected to exceed production in 2008-09, leaving world ending stocks forecast at 11.3 million tons, down from 12.01 million tons the year before, ICAC said.

Across Punjab, cotton lint traded at Rs 2,610-Rs 2,620/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,605-Rs 2,610/maund at Malot and Gidarbha; Rs 2,600/maund at Abohar; Rs 2,590-Rs 2,599/maund at Manasa; and at Rs 2,630-Rs 2,635/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,510-Rs 2,520/maund in Haryana and at Rs 2,400-Rs 2,410/maund in Rajasthan.

Cotton lint steady in west India
3 Jun 2008 3:11 pm

Mumbai - Spot cotton lint prices failed to move either sides as buying has almost stopped at the current higher rates at the markets across western India Tuesday.

Meanwhile, world cotton prices are projected higher in 2008-09, due mainly to an expected decline in the stocks-to-mill use rations in the world outside of China, the International Cotton Advisory Committee (ICAC) said in a press release Monday.

Global cotton production is expected to decline to 25.9 million tons in 2008-09 from 26.21 million tons in 2007-08, according to the press release. World cotton mill use is expected to remain stable at 26.7 million tons in 2008-09 as a result of slower global economic growth and higher prices of cotton relative to polyester, according to the release. World consumption is projected to exceed production in 2008-09, leaving world ending stocks forecast at 11.3 million tons, down from 12.01 million tons the year before, ICAC said.

At Kadi in Gujarat, cotton lint S-6 A-grade was quoted between Rs 24,300-Rs 24,500/candy while average-grade traded at Rs 24,000-Rs 24,300/candy. Kapas got offered at Rs 650-Rs 675/maund.

In Vidarbha region of Maharashtra, the 28-mm cotton lint traded at Rs 23,200-Rs 23,600/candy; 29-mm cotton lint traded at Rs 23,700-Rs 24,200/candy.

At Sendhwa market in Madhya Pradesh, the 28-mm cotton lint traded at Rs 23,200-Rs 23,700/candy; 29-mm cotton lint traded at Rs 23,900-Rs 24,500/candy; and 30+ mm cotton lint at Rs 24,600-Rs 24,800/candy.

Open weather allows outside activities to proceed across the US cotton belt (12:15 GMT 3rd Jun, 2008)
Uzbekistan reports high intensity heat (11:04 GMT 3rd Jun, 2008)
Kazakhstan reports requirement for replanting (10:57 GMT 3rd Jun, 2008)
Tajik re-sowing in progress (10:54 GMT 3rd Jun, 2008)
Indonesian mill purchases (9:16 GMT 3rd Jun, 2008)
New York spec/hedge report (9:05 GMT 3rd Jun, 2008)
ZCE slides on the third consecutive day (8:30 GMT 3rd Jun, 2008)
China’s production of non-woven cloth boosted (8:14 GMT 3rd Jun, 2008)
China’s long staple cotton price falls slightly (7:06 GMT 3rd Jun, 2008)
China Cotton Index (6:56 GMT 3rd Jun, 2008)
CNCE falls further (3:39 GMT 3rd Jun, 2008)

New York cotton settles lower

NEW YORK (June 04 2008): Cotton futures reeled from investor sales to finish lower on Tuesday while the trade digested news that regulators will investigate a searing run-up in the market that occurred in the first quarter of the year, brokers said.

The Commodity Futures Trading Commission announced a series of steps to boost oversight and transparency in volatile agricultural futures markets, including an investigation of the cotton price rally in February to March 2008 and more detailed reporting by index and swap dealers in futures markets.

The benchmark July cotton contract sank 1.23 cents to end at 64.21 cents per lb, trading from 63.10 to 65.01 cents. The December cotton contract fell 1.33 cents to finish at 72.83 cents, ranging from 71.65 to 73.76 cents.

Volume in the July contract stood at 22,497 lots at 3:03 pm EDT (1903 GMT) while December volume was at 16,001 lots. "I think it's closing the barn door after the mule got out," Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said about the move by the CFTC.

"There's no disclosure and you can corner the market because there's no limits in swaps," added Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida. "You wouldn't know who has a lopsided position (in cotton)."

A commodity swap is an agreement under which a floating, market or spot price is exchanged for a fixed price over a specified period. The user of a commodity would secure a maximum price and agree to pay a financial institution this fixed price.

In return, the user gets payments based on the market price for the commodity involved. Some traders said part of the selling seen in cotton on Tuesday may have been caused by some investors liquidating positions after the CFTC's move.

But others feel the bulk of the pressure came from options-related selling which spilled over into the futures ring. Brokers Flanagan Trading Corp sees support in the July cotton contract at 63.60 and 62.50 cents, with resistance at 64.30 and 65 cents. Volume traded Monday in the cotton market hit 41,443 lots, exchange data showed. Open interest in the cotton market fell 1,434 lots at 271,977 lots as of June 2, it added.

Business remains subdued on cotton market
RECORDER REPORT
KARACHI (June 04 2008): Subdued business was again witnessed on the cotton market on Tuesday as mills were hoping that the prices would come down on better production, experts said. The Karachi cotton Association (KCA) official spot rate was unchanged at Rs 3700, dealers said.

About the lacklustre business, cotton analysts were of the opinion that the mills after completion of the forward buying were waiting for the reports about the cotton sowing and then they may be able to analyse the current position before making any new deals. They said that the ginners, who have very little unsold stock, were still holding the stuff in anticipation of more gains in the coming days.

The spinners who imported cotton at the higher rate, now looking some confused as rates are still on the lower side, so, some of them were preferring to buy cotton from the local ginners instead of importing after passing through long and lengthier process, besides, costlier as well, they said.

The interesting thing here is that the report appearing regarding fall in the textile items, now the textile sector's performance improves or not as the mills have already imported all required stuff to meet the export target.

If, they said, contamination factor appeared, that could be a different thing and could not be solved after several incentives and concessions provided by the government to textile exporters.

One factor, which is very horrible for the whole world, is soaring oil prices, making the things costlier, exporters are also among them, they could not save themselves' from the outcome. Cost of production went up after rise in charges of electricity, gas, oil and other necessities, they said.

To compete the world the local exporters must try to win the buyers by making their stuff better and more attractive, they said. That may help the country to reduce the trade deficit, they added.

On Monday, the benchmark July cotton contract lost 0.30 cent to end at 65.44 cents per lb, trading from 64.86 to 66.76 cents. The new-crop December cotton contract shed 0.21 cent to finish at 74.16 cents, ranging from 73.55 to 75.41 cents.

Volume in the July contract stood at 18,288 lots at 2:56 pm EDT (1856 GMT) while December volume was at 13,057 lots. The following deals were reported : some 500 bales of cotton from Khipro sold at Rs 3500, 1000 bales from Rahim Yar Khan at Rs 4000 and 200 bales from Sultanabad at Rs 3800 (25 August 2008 delivery), dealers said.

================================================== =========
The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
================================================== =========
Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
================================================== =========
37.32 Kgs 3700.00 50 3750.00
-----------------------------------------------------------
Equivalent
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40 Kgs 3965.00 50 4015.00
================================================== =========

Cotton lint slides in north India
4 Jun 2008 3:59 pm




Abohar - Spot cotton lint prices declined by Rs 10/maund amid weak buying at major markets across north India Wednesday. Despite the low stocks, mills are avoiding purchases at the current higher rates.

India's cotton production during the coming crop year starting October is expected to rise three per cent to 3.25 crore bales on a slight increase in the area under cultivation, the Union Textile Commissioner J N Singh said Tuesday.

The country is estimated to produce 3.15 crore bales during the current crop year, up from 2.8 crore bales the previous year. One bale equals 170 kilograms. "The area under cultivation in the coming year is expected to grow slightly from 95.5 lakh hectares in 2007-08 as cotton farmers have benefited from the strong prices in the last few months," said J N Singh.

Across Punjab, cotton lint traded at Rs 2,600/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,600/maund at Malot and Gidarbha; Rs 2,590/maund at Abohar; Rs 2,580-Rs 2,590/maund at Manasa; and at Rs 2,620-Rs 2,625/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,500-Rs 2,510/maund in Haryana and at Rs 2,390-Rs 2,399/maund in Rajasthan.

Indian cotton prices down on overseas weakness, low demand
4 Jun 2008 4:39 pm

Mumbai - Weakness in overseas cotton prices and a slowdown in local demand depressed prices of the commodity in Indian markets during the week ended Wednesday, traders said.

"Local mills bought cotton heavily in the last month and most of them have enough stocks with them at present. Hence, offtake was low during the week," a Mumbai-based trader said.

As overseas prices have declined during the last week, many local mills are maintaining a wait-and-see approach, hoping for a further decline in prices, the trader said.

The price of Shanker-6 grade was quoted at Rs 24,300-Rs 24,800 a candy, down from Rs 25,300-Rs 25,500/candy last week. One candy is equivalent to 355.62 kilograms.

Daily arrivals of the crop in the market continued to decline with around 15,000-17,000 bales (1 bale=170 kilograms) arriving over the week compared with 20,000-25,000 bales the previous week.

Sowing of the new crop is almost 85% complete in the northern Indian provinces as most of the area is irrigated, the trader said.

"However, farmers in Maharashtra, a major producer, are waiting for the first monsoon showers before planting the crop as it is mainly rain-fed," said the trader.

The country is estimated to produce 31.5 million bales during the current crop year, which began in October, up from 28 million bales the previous year.

India's cotton production during the upcoming crop year is expected to rise 3% to 32.5 million bales on a slight increase in the area under cultivation, J N Singh, Union Textile Commissioner said.

"The area under cultivation...is expected to grow slightly, from 9.55 million hectares in 2007-08 as cotton farmers have benefited from strong prices in the last few months," Singh said.

In India, the cotton crop is sown in June-July and harvesting begins around October