Cotton

Solo deal in steady trend on cotton market

KARACHI (June 05 2008): Firmness prevailed on the cotton market on Wednesday as leading buyers were on the sidelines due to higher trend in the prices, experts said. The Karachi cotton Association (KCA) official spot rate was unchanged at Rs 3700, dealers said. According to the market sources not a single ginner was ready to sell cotton at the prevailing rates despite the falling trend in the New York cotton futures.

Short crop position in the local market encouraged them to do so and on the other hand, the spinners were bound to make new deals to meet their requirements, they said. Commenting on the fresh sowing, they said that the new production may be higher due to timely rains. Fresh rains in Nawabshah are good for the crop, they added. On Tuesday, the NY cotton futures moved lower. 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. A solo deal of 400 bales of cotton from upper Sindh sold at Rs 3800, dealers said.

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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
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Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
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37.32 Kgs 3700.00 50 3750.00
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Equivalent
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40 Kgs 3965.00 50 4015.00
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New York cotton slightly higher

NEW YORK (June 05 2008): Cotton futures ended slightly higher on Wednesday as trade buying offset investor sales and the market needs to build on its gains in the days ahead, brokers said. The now benchmark December cotton contract rose 0.03 cent to finish at 72.86 cents per lb, ranging from 71.75 to 72.90 cents.

The spot July contract rose 0.11 cent to end at 64.32 cents, trading from 63.29 to 64.39 cents. Volume in the December contract stood at 11,391 lots at 3:13 pm EDT (1913 GMT) while July volume was at 11,199 lots. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the key December contract would need to surmount the area at 73.20, 73.50 and then 73.76 cents.

"It's got to get through there before we get anything going," he said, adding that failure to do so meant cotton futures may move sideways in the meantime. The market is still digesting news the Commodity Futures Trading Commission has taken 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.

Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said in a report if cotton's recent "weakness was due to fears of government intervention, then those fears should have been put to rest."

Separately, cotton brokers believe the weekly US Agriculture Department's export sales data would show total US cotton sales ranging from 100,000 to 200,000 running bales (RBs, 500-lbs each), from 129,700 RBs last week. US cotton shipments of previously booked orders were seen ranging from 250,000 to 300,000 RBs, from 270,500 RBs in last week's report.

Traders said resistance in the December contract was at 73.20 and 73.50 cents, while support was at 72 and 70.50 cents. Volume traded Tuesday in the cotton market hit 43,588 lots, exchange data showed. Open interest in the cotton market rose 1,127 lots at 273,104 lots as of June 3, it added.

ICE cotton ends mixed on trade buying
5 Jun 2008 10:17 am

New York - ICE Futures US cotton settled mostly higher as trade buying dragged cotton futures near unchanged, though the market failed to establish momentum during the session.

July futures settled up 11 points at 64.32 cents a pound and the October contract settled down 1 point at 69.27. December cotton settled up 3 points at 72.86 cents.

Futures traded sharply lower early in the sessions before fund selling into commercial buying pushed prices near unchanged. Strong outside markets may have discouraged more selling, an analyst said. Futures traded an inside day in Tuesday's 63.10-65.01 range.

Traders said the market continues in technically dominated trade in light of bearish oversupply and bullish hot, dry weather in important West Texas growing regions.

Cotton must take out recent highs or lows to establish direction, analysts said. On the upside, July futures need to surpass the 64.50, 64.70 and 65.01 levels, said Mike Stevens, futures analyst at SFS Futures in Mandeville, La. On the downside, July support is at Tuesday's low of 63.10 and then 62.30, according to Jack Scoville, vice president of Price Futures Group in Mandeville, La.

ICE daily cotton stocks increased by 7,346 480-pound bales Tuesday to total 1.57 bales with 59,975 awaiting review.

ICE cotton open interest increased by 1,127 positions Tuesday to total 273,104, the exchange reported.

Volume was estimated 19,015 lots. In options, approximately 4,640 calls and 6,634 puts traded, according to exchange data.

Cotton lint dips further in north India
5 Jun 2008 4:46 pm

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

Across Punjab, cotton lint traded at Rs 2,590/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,590/maund at Malot and Gidarbha; Rs 2,580/maund at Abohar; Rs 2,570-Rs 2,580/maund at Manasa; and at Rs 2,610-Rs 2,615/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,490-Rs 2,500/maund in Haryana and at Rs 2,380-Rs 2,389/maund in Rajasthan.

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.

Cotton lint stagnant in west India
5 Jun 2008 4:44 pm

Mumbai - Continuing with the trend of last few days, spot cotton lint remained steady Thursday also as millers are avoiding purchases at the current higher rates at the markets across western India.

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.

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.

Cotton prices touch Rs 4,000 per 40-kg

MULTAN (June 06 2008): Cotton is being sold at Rs 4,000 per 40 kg as the ginners are demanding higher price for good quality cotton. Despite the low volume in the business, the trend of increase in the prices continues. According to the market sources, further increase in the prices of cotton is expected.

New York cotton settles higher

NEW YORK (June 06 2008): Cotton futures ended higher on Thursday in a session dominated by spread business as players moved positions out of the spot contract in a process expected to pick up going into next week, brokers said. The now benchmark December cotton contract rose 0.15 cent to finish at 73.01 cents per lb, ranging from 72.31 to 73.90 cents.

The spot July contract added 0.33 cent to end at 64.65 cents, trading from 63.71 to 65.37 cents. Volume in the December contract stood at 11,205 lots at 3:10 pm EDT (1910 GMT) while July volume was at 11,424 lots. "It's all spread activity," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. "Everybody's rolling out of July."

Rollover involves moving all of one's positions, long and short, out of the spot contract and into the most active contract - in this case, from the July to the December. The process is expected to pick up sharply when financial index funds begin their roll on Friday.

Analysts said the steadiness in cotton also stemmed from the strength in other commodity markets along with higher-than-expected US cotton sales in the US Agriculture Department's weekly export sales report.

USDA showed total US cotton sales at 577,900 running bales (RBs, 500-lbs each), from sales last week of 129,700 RBs. USDA said US cotton export shipments hit 243,400 RBs, from 270,500 RBs in last week's report. The trade was expecting sales to range from 100,000 to 200,000 RBs, with shipments at 250,000 to 300,000 RBs.

Separately, forecasters DTN Meteorlogix said the key growing area of Texas should be mostly dry through the weekend and into Monday. "There are starting to be some serious problems with record heat, wind and blowing sand in west Texas," said a report by Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

Traders said resistance in the December contract was at 73.20 and 73.50 cents, while support was at 72 and 70.50 cents. Volume traded Wednesday in the cotton market hit 28,120 lots, exchange data showed. Open interest in the cotton market rose 38 lots at 273,142 lots as of June 4, it added.

India monsoon 14pc below normal
6 Jun 2008 10:12 am

New Delhi - India's monsoon rains, crucial for the meeting the country's rice and coarse grains production, made a weak start with showers being 14 per cent below normal in the first four days of June, the India Meteorological Department (IMD) said late Thursday on its website.

Of the 36 sub-divisions into which the IMD divides the country, 23 received normal or excess rains while 13 received scanty rains, the department said. The monsoon hasn't advanced at all, since June 2, after hitting the mainland on May 31, a day before the department's official start to the season.

The IMD said that the monsoon will likely advance into more parts of the southern peninsula and eastern India by June 11. The agency said the west coast may get more rains next week, but didn't clarify if that will be the monsoon showers. Monsoon typically advances to the west coast next.

The Central government, which faces national elections next year, is banking on a bumper harvest in September and October to cool prices and curb inflation that has surged to a record, partly aided by a rise in food prices.

India's summer or kharif crop, the sowing of which is currently underway, accounts for most of the rice, sugarcane, peanuts, soybean, coarse grains, pulses and cotton produced in the country.

Opinion is divided among the IMD and its affiliate, the National Centre for Medium Range Weather Forecasting, about when the monsoon will revive. The IMD said it could revive as early as this weekend, though the NCMRWF thinks it could revive by the middle of next week.

The progress and spread of monsoon rains are critical to the country's biggest agricultural crop, as 60 per cent of its farmlands are still rain-fed.

With farming providing livelihood to nearly 65 per cent of the population, monsoon rains are critical in ensuring a growth in income in the country's semi-urban and rural areas, which helps increase demand for items such as consumer durables, automobiles and gold.

Cotton lint steady in north India
6 Jun 2008 5:21 pm

Abohar - Spot cotton lint prices remained unchanged amid thin business at major markets across north India Friday. Despite low stocks, mills are avoiding purchases at the current higher rates.

Across Punjab, cotton lint traded at Rs 2,590/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,590/maund at Malot and Gidarbha; Rs 2,580/maund at Abohar; Rs 2,570-Rs 2,580/maund at Manasa; and at Rs 2,610-Rs 2,615/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,490-Rs 2,500/maund in Haryana and at Rs 2,380-Rs 2,389/maund in Rajasthan.

Cotton lint unmoved in west India
6 Jun 2008 5:23 pm

Mumbai - Spot cotton lint remained steady Friday also as millers are avoiding purchases at the current higher rates at the markets across western India. Ginners are not ready to sell at the lower level looking at the limited stocks.

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.