Login ID:
Partner Login
Contact Us : 7066511911

WEEKLY: Limited Upside Likely Ahead In ICE Cotton

2 Sep 2019 9:52 am
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 
MUMBAI (Commoditiescontrol) - Most active cotton December contract on ICE closed with gains of 62 points at 58.83cents/lb. Whereas March 20 contract was up by 29 cents at 59.44 cents/lb. December/March spread was 74 points.

Cotton traded in a range of 290 points (high 59.49 and low 56.59) during the week. The uncertainties of the US-China trade situation weighed on the market during the week whereas likely disruption in supply due to Hurricane Dorian supported the market.

Cotton made a low of 56.59 cents/lb on Monday weighed by last week’s tariff impositions by the US and China on each other. However, prices recouped some of their early losses after US President Donald Trump said both the countries would soon restart trade talks. By Tuesday market was able to recoup it losses and touch a high of 59.49 cents/lb on Tuesday.

Crop progress report was released by US Department of Agriculture late Monday for the week ended August 26. The report showed that the crop condition for the 15 cotton-growing states in the US deteriorated further, with the "good" rating slipping to 35% from 41% a week ago. The "excellent" rating remained unchanged at 8%, while the "fair" rating improved to 40% from 36% a week ago. Texas’ "good" rating slipped to 28% from 36% a week ago.

The market managed to close in the green for rest of the week except Friday on concerns of deteriorating crop condition and concerns of further damage of crop in US Southeast due to Hurricane Dorian. The concern of losses due to Hurricane Dorian was so strong that the market ignored weak cotton sales and export numbers published during the week. On Friday market closed with some minor losses due to long weekend. Markets will remain closed on Monday on account of Labor Day holiday.

Hurricane Dorian which has now strengthened to category 5 hurricane is likely to bring abundant rains in the southeast US which contributes about 20% of US cotton production. Heavy rains at this stage when cotton bolls are opening may impact yield and quality of crop.

The latest CFTC report for futures and options combined showed that speculators reduced their net short potion by 770 lots to 40429 lots where as trade reduced their net short position by 1356 lot to 2561 lots .Open interest was 285289 lots up 10051 lots from last week.

Impact of Hurricane Dorian will be known this week. If it affects crop in Southeast we may see some short-covering buy managed money. Further market is in oversold condition so any short covering will lead to some improvement in prices. But the upside is likely to be limited due to large US crop and slowdown in the demand of cotton mainly due to US-china trade war and global recession.

Major support for the week is 57cents/lb and resistance is 60cents/lb.

(By Commoditiescontrol Bureau)

  Rate this story 1 out of 52 out of 53 out of 54 out of 55 out of 5 Rated

   Post comment
Comment :

Note : This forum is moderated. We reserve the right to not publish and/or edit the comment on the site, if the comment is offensive, contains inappropriate data or violates our editorial policy.
Name :  
Email :  

Top | Post Comment  

Latest Special Reports
Weekly: ICE Cotton Consolidates Past 70 Cents Touching ...
USDA Revises Down 2019-20 Global Cotton Production Esti...
Weekly:ICE Cotton Up 5th Consecutive Week on Higher Sal...
USDA predicts Indian Cotton output at 37.5 mn Bales;CCI...
Weekly: ICE Cotton Ends 2019's Final Week on Positive N...
Top 5 News
Weekly:Green/White Pea, Urad Settles Firm, Tur/Chana We...
USD/INR (Jan. 20) Testing Short-term Support Near 70...
USD/INR (Jan. 20) Testing Range Support Near 70.80
USD/INR (Jan. 20) Testing Range Support Near 70.80
China Commits Purchase Of $50 Billion Worth U.S. Agri P...
Top 5 Market Commentary
Urad/Moong Declines, Masoor Gains In Delhi
India's 2019-20 Daily Cotton Arrivals Up 22.7% Y/Y At 1...
Cotton Gains In Central, South India On Mills' Demand
Cotton Prices Up In North India On Low-Level Demand
Tamil Nadu Sugar Mill Prices 18 January 2020
Copyright © CC Commodity Info Services LLP. All rights reserved.