Login ID:
Partner Login
Contact Us : 7066511911

Weekly ICE cotton: Ends Sharply Up; Hopes Pinned On US-China Trade Deal

15 Sep 2019 7:30 pm
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

MUMBAI (Commoditiesontrol) – Cotton prices on the Intercontinental Exchange ended up sharply last week as tensions between the US and China eased in the run-up to their scheduled trade talks next month, rekindling hopes of a deal between the two countries.

The most active December cotton contract ended up 6.3% at 62.28 cents per lb. Volumes in the December contract rose to 25,742 compared with 16,068 a week ago. The March 2020 contract ended up 5.6% to 62.78 cents per lb.

Initially, during the week, prices rose in the run-up to the weekly export sales data and the World Agricultural Supply and Demand Estimates for the month of September.

Traders largely overlooked the weekly crop progress report as on September 8 which showed that the “good” rating for the 15 cotton-growing states stood at 37% compared with 39% a week ago, while the “fair” rating inched up to 39% from 37% previous week. The “excellent” rating slipped to 6% from 9% earlier.

Meanwhile, China on Wednesday scraped 16 US items from tariffs, including anti-cancer drugs and animal feed, which boosted prices.

US President Donald Trump termed China’s move as “the right thing."

By mid-week, the thawing of relations between the US and China offset the disappointing export sales data and the bearish WASDE report.

While welcoming China’s move of exempting some US goods from the tariff list, US President Donald Trump announced a slight delay in the imposition of tariffs on $250 billion worth Chinese goods to October 15 from October 1 as a “gesture of goodwill”.

Trump also hoped he could strike a deal with the Chinese.

"I deal with them and I know them and I like them…I hope we can do something," said Trump about a likely trade deal.

About reports of an interim deal with China, Trump hinted he would prefer a whole deal.

“A lot of people are talking about, and I see a lot of analysts are saying: an interim deal, meaning we’ll do pieces of it, the easy ones first…But there’s no easy or hard. There’s a deal or there’s not a deal. But it’s something we would consider,” Trump told reporters on Thursday.

Meanwhile, for the week ended September 5, net sales for 2019-20 were down 54% from the previous week at 74,600 RB and down 63% from the prior 4-week average. For 2020-2021, total net sales were merely 500 RB towards Japan. Net sales of the Pima cotton stood at 3,800 RB, compared with 900 RB the previous week.

Thursday, the USDA also released the World Supply and Demand Estimates for September which lowered beginning stocks, production, exports, and consumption for 2019-20.

Beginning stocks were slashed by 400,000 bales this month, while US production was lowered 654,000 bales to 21.9 million, due to a decline for the Southwest output.

Consumption too was lowered 100,000 bales, while exports were pegged 700,000 bales lower due to reduced US production.

However, traders largely ignored these sets of data and instead focussed on the US-China trade relations.

In fact, on Friday China added US agricultural products like soybean and pork to the list of imports exempted from tariffs.

There were also reports quoting unnamed sources about China buying “over 600,000 tonnes” of US soybeans on Thursday, the biggest purchase since June, boosting sentiment further.

Data released by the US Commodities Futures Trading Commission data for the week to September 10 showed managed money traders reduced their net short positions by 4,796 thereby narrowing total net short positions to 34,564. Open interest for the week stood at 297,063, up 5,939 on week.

This week, prices could largely take cues from any developments on the US-China trade relations.

The oncoming storm in the Pacific ocean, heading towards the Bahamas and the coast of Florida could also keep prices firm.

The October contract could trade in the 61.77-63.09 cents range this week, with an upward bias.

(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
Top 5 News
Cabinet approves allocation of additional foodgrains fo...
Cabinet approves merger of CRWC with CWC
India, Fiji sign MoU for cooperation in agriculture and...
Farmers lay blame on govt for current soybean seeds cri...
Weekly outlook: CPO may trade under pressure in Malaysi...
Top 5 Market Commentary
Sugar prices stay steady, but buying improved at lower ...
Wheat prices steady/firm on increased flour mills’ dema...
Govt buys over 432 lakh tonnes wheat for central pool
Chana dips in selective spot mkts amid weak futures
Spot guarseed, gum Prices trade nearly steady, futures ...
Copyright © CC Commodity Info Services LLP. All rights reserved.