Login ID:
Partner Login
Contact Us : 7066511911

Cotton Yarn Prices Set to Move Higher amid Expanding Spinning Margins, Firm Cotton Prices

26 Jan 2021 12:13 pm
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

Mumbai (Commodities Control)- Despite a sharp rise in prices, the rally in global cotton prices is far from over. ICE Mar cotton contract posted fourth straight weekly last week.

Fundamentally, ICE cotton’s move higher has been largely based on enormous liquidity, weak dollar index and Chinese demand.

Even technical charts echo the bull trend. From a chart perspective, Cotton Yarn (CZCE) indicates a bullish trend reversal which simply means that there is a strong probability of more upside with a next target of 24,000 in the near term.

Chart no. 1 shows that Cotton Yarn futures (CZCE) have registered a breakout above the key downtrend line near 21,000.

This is further substantiated by chart no. 2 below shows that the spread (spinning margin) of Cotton Yarn (CZCE) vs. Cotton No. 1 (CZCE) has started to expand.

From a chart perspective in over three years, the reference range for Cotton Yarn (CZCE) vs. Cotton No. 1 (CZCE) ratio spread remains well-defined between 1.30x – 1.60x. However the spread has recently turned higher from the lower threshold (current reading near 1.42x). There is meaningful potential for the spread to expand to the upside. Simply put it means that demand for yarn will push its prices northwards along with that of cotton.

With reference to the chart, we see Cotton Yarn (CZCE) outperforming Cotton No. 1 (CZCE). We, therefore, advise on a relative trade basis to Buy Cotton Yarn (CZCE) & Sell Cotton No. 1 (CZCE).

Note : Spread betrween ZCE cotton yarn and ZCE cotton indicates Gross Spinning Margin

  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
Cotton Yarn Prices to Resume Northward Rally; Expanding...
Weekly: NY Cotton Gains For the First Time in Seven We...
Weekly: NY Cotton Suffers Setback for Sixth Straight W...
Weekly: ICE Cotton Futures Fall Apart for Fifth Consecu...
Weekly: ICE Cotton Finishes Sub-85 Cents in a 4th Stra...
Top 5 News
Crisis in Mozambique Could Mean Trouble for India's Foo...
Cotton Yarn Prices to Resume Northward Rally; Expanding...
Weekly: Most Pulses Rise Over the Week Amid Mill Purcha...
Weekly: NY Cotton Gains For the First Time in Seven We...
Weekly: NY Sugar Ends Positive on Brazil Weather Concer...
Top 5 Market Commentary
Ukraine Sunoil Output & Export Set to Rise Over 16% in ...
Gujarat Sugar Mill Prices –17 april 2021
Maharashtra Sugar Mill Prices – 17 FEB 2021
Tamil Nadu Sugar Mill Prices –17 APRIL 2021
Uttar Pradesh Sugar Mill Prices -17 APRIL2021
Copyright © CC Commodity Info Services LLP. All rights reserved.