Cotton

U.S. Economy

Federal Reserve Chairman Bernanke said in a speech last night at an economic conference in Boston that "growth risks remain to the downside," but the Fed "will strongly resist an erosion of longer-term inflation expectations..." The speech was seen as hawkish support for the dollar. The June 2009 eurodollars closed down .22 at 96.04, the lowest close in over six months.

The U.S. Census Bureau said that exports increased $4.5 billion to $109.6 billion in April, while imports increased $9.1 billion to $182.5 billion. The result was $60.9 billion of net imports, up from $56.5 billion in March. The September U.S. dollar index jumped up .88 to 74.16, the highest close in three months.

Grains and Cotton
The USDA's 2008-2009 U.S. ending stocks estimate of:
Corn was reduced from 763 to 673 million bushels.
Soybeans was reduced from 185 to 175 billion bushels.
Wheat was increased from 483 to 487 million bushels.
Sugar was reduced from 1.336 to 1.273 million tons.
Cotton was reduced from 5.6 to 5.4 million bales.

The USDA's 2008-2009 world ending stocks estimate of:
Corn was increased from 99 to 103 million tons.
Soybeans was pegged at 50.4 million tons.
Wheat was increased from 124 to 132 million tons.
Cotton was reduced from 55.5 to 54.1 million bales.

The USDA estimated winter wheat production at 1.82 billion bushels, roughly as expected. July wheat closed up 20.5 cents at $8.09.

December corn closed up 17.5 cents at a new oontract high of $7.027 and November soybeans were down 6 cents at $14.41 after this morning's USDA report and yesterday afternoon's progress reports. July cotton was up .25 at 66.25.

East India Cotton Association prices - Jun 10
11/06/08

BANGALORE, Jun 10 (Reuters) - The following are the daily Cotton prices supplied by Indian based East India Cotton Association.The prices are in Indian Rupees per Candy (355.62 Kgs). PRODUCTS CURRENT RAW COTTON(FINE)---------------------- ICS-201 (Below 20mm) 23400 ICS-101 (Below 22mm) 23900 ICS-102 (22mm) 18400 ICS-103 (23mm) 20500 ICS-104 (24mm) 22100 ICS-202 (25mm) 24700 ICS-105 (25mm) 22200 ICS-105 (27mm) 23100 ICS-105 (28mm) 23600 ICS-105 (29mm) 24600 ICS-105 (31mm) 25300 ICS-106 (33mm) 26100 ICS-107 (35mm) 32500 ICS-301 (26mm) 23600 (---Bangalore Commodities

Low carry-over stock pushes up cotton prices’
[ News Desk 11/06/08]

Coimbatore: Low carry-over stock of 43 lakh bales (170 kg each) is behind the sky-rocketing of raw cotton prices this year, says the textile industry. According to B K Patodia, Vice-Chairman and Managing Director of GTN Textiles Ltd, the ending stock at 43 lakh bales amounted to 18 per cent of the stock-in-use ratio and this low carry-over has led to soaring of domestic cotton prices, whereas the global average stock-in-use for 2007-08 is 44 per cent. More India business stories Some of India’s competitors such as China, Pakistan and Turkey have higher stock-to-use cotton ratio of 34 per cent, 35 per cent and 31 per cent respectively. Allowing export disproportionate to its domestic consumption has created imbalance in demand and supply, Patodia felt. He held that cotton export should be below 20 per cent of the crop. He also felt the need for levying 5 per cent duty on cotton export as exporting Indian cotton at low prices would amount to subsidising foreign buyers. Alternatively, he wanted the duty on cotton imports be removed or brought down to 5 per cent. One of the traditional tools of cotton textile industry in arriving at the comfort zone of raw material buffer at the end of the cotton budget (Oct-Sept) year is estimating the stock-to-use ratio of cotton (namely, the stock left as a percentage to the total consumption demand) available by end-September (when the cotton year closes). The thumb rule from industry stalwarts stipulates a carryover stock equivalent to an average three months’ cotton consumption by the industry or 25 per cent of stock-to-use ratio that will allow the industry to retain consistency in production. As per the current consumption figures, the average monthly consumption of cotton by the textile industry is put at 22 lakh bales and hence the total desirable level of carryover stock will be 66 lakh bales. The balance sheet for 2007-08 worked out at the Cotton Advisory Board (CAB) meet last month has spelt the closing stock for the season at 43 lakh bales, one of the lowest ever carry-over stocks in recent times, according to the industry. According to the CAB worksheet for 2007-08 cotton season, of the total estimated cotton supply of 369 lakh bales (comprising a final estimated production of 315 lakh bales along with an opening stock of 47.50 lakh bales and imports of another 6.50 lakh bales), the total demand for mill consumption and non-mill consumption is put at 241 lakh bales (comprising organised mill consumption of 203 lakh bales, SSI mill consumption of 23 lakh bales and non mill consumption of 15 lakh bales). More India business stories Besides, the balance sheet has also worked out the total cotton exports for the yearat an all-time high of 85 lakh bales which, according to the industry, represents 27 per cent of the total crop and is responsible for eroding the closing stock.

Cotton lint up on millers' demand
11 Jun 2008 4:14 pm

Abohar - Spot cotton lint was quoted further higher for the third consecutive day Wednesday as millers continued to buy from major markets across north India. The reducing stocks of cotton lint in the region and apprehensions of declined cotton production next season are also supporting the spot prices. The region is now left with only 50,000-60,000 bales of cotton lint.

Sowing of cotton is over in north India, and the initial estimates by traders indicate at decline in acreage in the region. According to the estimates, the acreage of cotton has declined 10 per cent to 15 per cent in Punjab, 35 per cent to 40 per cent in northern Rajasthan whereas it remained same as that in previous year in Haryana.

Across Punjab, cotton lint traded at Rs 2,650/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,635/maund at Malot and Gidarbha; Rs 2,635/maund at Abohar; Rs 2,625/maund at Manasa; and at Rs 2,660-Rs 2,670/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,550-Rs 2,570/maund in Haryana and at Rs 2,430-Rs 2,460/maund in Rajasthan.

Indian cotton prices tad up on low stocks, export inquiries
11 Jun 2008 4:51 pm

Mumbai - Indian cotton prices in the local markets during the week ended Wednesday rose marginally on low availability of good quality cotton and fresh export inquiries, traders said.

"As it is the end of the season, availability of good quality cotton in the market is very low and traders aren't in a hurry to sell, as they expect a further rise in prices," said Dinesh Nagda, a Mumbai-based trader.

Although local mills' purchases had slowed in the past fewweeks, some demand was reemerging for good quality cotton as the mills sought to replenish their stocks.

"Also, after more than three weeks there were some export inquires in the market today, giving a slight support to prices," said Nagda.

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

Daily arrivals of the crop in the market were also negligible, with only Gujarat witnessing a substantial quantity, said Shirish Shah, another Mumbai-based trader.

Sowing of the new crop is almost complete in the northern Indian states as most of the area is irrigated, while sowing in Maharashtra, a major producer, is yet to begin, he said.

"In Maharashtra, sowing of the new crop will start only after 10 days, as the first spell of rains has just hit the state," said Shah. Maharashtra's cotton crop is mostly rain-fed.

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

In India, the cotton crop is sown in June-July, while the harvest starts around October.

Deal finalised at Rs 4,010 on cotton market

KARACHI (June 12 2008): A deal was finalised at the season's highest rate on the cotton market on Wednesday amid pre-budget session, experts said. The Karachi cotton Association (KCA) official spot rate was unchanged at Rs 3800, dealers said.

Market sources were of the view the nation is not expecting something very positive in the absence of encouraging development in the country for a long time.

According to the expectations there were some speculations in the market that prices may continue to rise as the country is going to slash subsidies over the food, oil and fertilisers. In the meantime, there are a few hopes that the new government may try to remove grievances of the masses, some brokers said.

On Tuesday, cotton futures settled mixed in mostly spread business as the market was content to digest what the trade initially saw as a friendly government crop report, brokers said.

The new benchmark December cotton contract fell 0.13 cent to finish at 74.41 cents per lb, ranging from 74.01 to 75.36 cents. But the spot July contract rose 0.25 cent to end at 66.25 cents, trading from 65.51 to 66.90 cents. Volume in the December contract stood at 13,304 lots at 2:59 pm EDT (1859 GMT) while July volume was at 14,366 lots.

The following deals were reported :some 1000 bales of cotton done was exporters to mill for Karachi delivery at Rs 4000 and 400 bales from Ghotki at Rs 4010, they said.

================================================== =========
The KCA Official Spot Rate for Local Dealings in Pak Rupees
-----------------------------------------------------------
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 3800.00 50 3850.00
-----------------------------------------------------------
Equivalent
-----------------------------------------------------------
40 Kgs 4072.00 50 4122.00
================================================== =========

Cotton lint marches ahead in west India
17 Jun 2008 5:33 pm

Mumbai - Cotton lint rallied further with gains at the spot markets across western India Tuesday amid surge in yarn prices, limited stocks in the region and consistent demand from millers. The S-6 variety of cotton lint traded touched the level of Rs 26,000/candy.

Traders say, yarn prices have gone up by Rs 15-Rs 20/kg during the last one month. The sky-rocketting prices of crude oil have further boosted polyester prices, and its effect is now being seen on cotton yarn. Loading of cotton yarn has also increased significantly during the last one month.

The reducing stocks are also supporting cotton lint prices. According to an estimate, ginners across the country are having unsold stock of only 13.5 lakh bales, which is comparatively very less for the requirement of the remaining season. Gujarat is having only five lakh bales of cotton lint in stocks.

At Kadi market in Gujarat, cotton lint S-6 A-grade was quoted at Rs 25,800-Rs 26,000/candy while average-grade traded at Rs 25,500-Rs 25,800/candy.

At Sendhwa market in Madhya Pradesh, the 28-mm cotton lint traded at Rs 25,700-Rs 26,000/candy; 29-mm cotton lint traded at Rs 26,100-Rs 26,300/candy; and 30 mm cotton lint at Rs 26,400-Rs 26,800/candy.

Cotton lint trades above Rs 2,700
17 Jun 2008 3:26 pm

Abohar - Spot cotton lint prices jumped above Rs 2,700/maund at major markets across north India Tuesday. Looking at the bullish trend in other parts of the country and consistent demand from millers, ginners are willing to sell the remaining limited stock at higher prices. Traders say, the reducing stocks and surge in yarn prices are supporting cotton lint in the spot markets.

The standing crop of cotton in many cotton-producing areas in north India is likely to be benefitted from the heavy rainfall that occurred in the region yesterday. However, incessant rains may damage the crop.

Across Punjab, cotton lint traded at Rs 2,700/maund at Fazilka, Kotakpura, Muktasar and Bathinda; Rs 2,695-Rs 2,699/maund at Malot and Gidarbha; Rs 2,685/maund at Abohar; Rs 2,675/maund at Manasa; and at Rs 2,700-Rs 2,710/maund at Rampura, Barnala and Budhaldha.

Cotton lint traded at Rs 2,650-Rs 2,680/maund in Haryana and at Rs 2,520-Rs 2,580/maund in Rajasthan.

ICE cotton rallies on late spillover
19 Jun 2008 10:06 am

New York - ICE Futures US cotton settled sharply higher Wednesday as a late spillover rally boosted gains amid commercial buying in light trade.

Most-active December cotton settled up 110 points at 82.05 cents a pound and nearby July settled 101 points higher at 73.82 cents.

Futures opened slightly higher and spent the early part of the session moving choppily near unchanged. The market came under pressure midday amid weakness in crude oil and Chicago Board of Trade grains. Traders liquidated the June contract ahead of its June 24 expiration.

Commercials bought back months, propping up the market, said John Flanagan, president of Flanagan Trading in Fuquay-Varina, N.C. Near the end of cotton trading, crude and grains moved to the upside and cotton followed, closing sharply higher on the day.

December cotton faces resistance in the technically congested area from 81.50-83.75, said Mike Stevens, analyst at SFS Futures in Mandeville, La. The market is becoming overbought, Stevens said. A setback would be healthy for the market, he noted.

Strong support for Dec cotton is at 79-79.50, said Sharon Johnson, senior cotton analyst at First Capitol Group in Atlanta. December futures must stabilize above 82.50 basis Dec, leaving futures open to push up to 85.05, the 50% retracement level, said Alan Brugler, president of Brugler Marketing and Management in Omaha, Neb.

ICE daily cotton stocks increased by 6,383 480-pound bales Tuesday to total 1.603 million bales with 62,792 awaiting review.

ICE cotton open interested decreased by 1,877 positions Tuesday to total 221,739, according to the exchange.

Volume was estimated at 14,296 lots. In options, approximately 13,398 calls and 10,359 puts traded, according to exchange data.


Close Change Range
Jly 73.82 +101 pts 72.07-73.98
Oct 78.17 +110 pts 76.47-78.29
Dec 82.05 +110 pts 80.10-82.08

Firm trend in modest business on cotton market

KARACHI (June 19 2008): Steady trend was again seen on the cotton market on Wednesday as mills were still active to make the forward deals, experts said. The Karachi cotton Association (KCA) official spot rate was unchanged at Rs 3800, dealers said.

The ginners were also seen among the sellers but they were not ready to lower the asking prices, market players observed. Exporters continued to sell as prices were matching with their psychological level, they added. Commenting on the crop position for the coming season, they said that timely rains will help in achieving the target.

On Tuesday, the NY cotton futures were lower as the key December cotton contract fell 1.29 cents to conclude at 80.95 cents per lb, dealing from 80.53 to 84.04 cents. Spot July cotton dropped 1.81 cents to 72.81 cents, trading from 72.60 to 76.20 cents. Volume traded in the December contract stood at 23,535 lots while July volume was at 6,078 lots.

The following deals were reported as some 400 bales from Salah Pak sold at Rs 3700, 1500 bales from Mirpur Mathelo at Rs 3700, 600 bales from Khan Pur Mehar at Rs 3850 Rs 4000, they said.

================================================== =========
The KCA Official Spot Rate for Local Dealings in Pak Rupees
-----------------------------------------------------------
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 3,800.00 50 3,850.00
Equivalent-------------------------------------------------
40 Kgs 4,072.00 50 4,122.00
================================================== =========