Mumbai (Commoditiescontrol)- ICE Cotton futures rallied around 4.50 percent to settle over three-weekly high on strong demand as the USDA’s weekly data shows a jump in export sales of cotton over 6 percent from last week while exports of the commodity remained 82 percent higher than the prior 4-week average.
Though it was a holiday shortened week but ICE cotton managed to close the week with modest gains as ICE July cotton contract rose 368 points or 4.48 percent and finished at 85.80 cents per lb whereas most active December contract closed with gains of 256 points or 3.08 percent at 85.88 cents per lb. July/Dec spread narrowed down to 8 points a fall of 102 points week on week.
ICE cotton moved up sharply on back of tight supply and strong demand as Us cotton was the cheapest origin in the global market as compared to its other competitors Brazil and India. Further long liquidation from managed money also slowed down considerably from 10300 contracts to long liquidation of1203 contracts for the week.
The weekly data release from CFTC showed managed money was 35,012 contracts net long on 1st June, down 1,203 contracts from the previous week.
Long side positions saw a fall of 440 contracts while short side positions witnessed an increase of 763 contracts.
Trade increased their long side position by 2,864 contracts and short also increased by 5,043 contracts. The open interest for the week was registered at 292,507 contracts against 282,476 contracts last week.
According to the Cotton-on-Call based New York, dated 3rd June, the total unfixed call sales were reported at 108,905 vs 108,559 contracts on a weekly basis and total unfixed call purchases were reported at 47,784 vs 47,322 contracts. For July 2021, unfixed call sales were registered at 15,933 vs 19,504 contracts last week and unfixed call purchases were reported at 4,157 vs 4,772 contracts.
The U.S Department of Agriculture (USDA)'s weekly export sales report showed net sales of 180,800 Running Bales for the 2020-2021 marketing year, 6 percent above the previous week and 82 percent higher than the prior 4-week average. The report also included 366,500 RB of exports with 96,400 RB to top-cotton consumer China. Exports were also 13 percent higher than the previous week and 5 percent above the prior 4-week average.
Meanwhile, cotton planting has managed to catch up in just about every state. The Cotton Belt as a whole has now planted 64 percent of expected acreage, according to this week’s Crop Progress Report, which is just one percentage point behind the five-year average. This week’s report began reporting squaring, which is also right on normal pace so far at 6 percent of the crop, but it was the beginning of crop condition reporting that caught the attention of many traders.
Next week’s big focus will be the June WASDE report, which will be released shortly after next week’s Export Sales Report. Aside from these fundamental reports, July options will expire the next Friday, which is also the end of the major rolling period for large Index funds. Traders will have plenty on their plates.
Market is likely to continue it upward journey as global economies continued to reopen gradually with ease in lockdown restrictions. This may give boost to demand further on the other hand long liquidation from Managed money appears to be complete for July contract this should give fuel to ongoing rally. Further weak dollar should be supportive to the market.
Immediate support and resistance for Cotton #2 lies at 83.26 and 88.16 cents per lb, respectively.
(By Commoditiescontrol Bureau: +91-22-40015505)
0 Comments 
Post Comment 
