May 14 gave up 69 points on the week to settle at 88.35 while trading a slight 217 point range that just missed last week’s high value. This week’s lower settlement was in line with the expectations of most analysts.
As for the front month, it appears that demand has been rationed somewhat at volume weighted average prices in an approximate range of 86.50 – 88.60.
For next week our directional call is for…
May 14 gained 70 points today post a US cotton export report that reportedly met the trade’s general expectations to settle at 88.35. The settlement was within the upper one half of today’s 135 point trading range (87.55 – 88.90).
The increasing net sales logged on the last two US export reports relays that demand for US cotton is being rationed. Hence, it seems unlikely that cotton will need to move a great deal higher, at this time, in order to ration stocks further.
For Mon, our directional call for the front month is for
The USDA projects area sown to cotton within the US next season to be at 11.5M acres with harvested area projected to be at 9.7M acres (16% abandonment) and production of 16.3M bales.
The USDA projects US exports for next season at 11.0M bales vs the 10.1M bale projection recently put forth at the NCC conference in Washington, D.C. Projected ending stocks for the 2014/15 MY are projected at 4.6M bales, which incorporates the USDA’s current 3.0M bales ending stocks projection for the current MY.
World consumption is expected to rise to nearly 113M bales while world production is expected to be near unchanged at 117M bales; world ending stocks are projected to rise to a record 100.5M bales.
The USDA’s projections are more optimistic for the US S&D than were recent estimates put forth from the National Cotton Council.
More on this i today’s daily and weekly reports.
Net sales of total cotton for the week ending Feb 13 were reported at 72.4K RBs, off significantly from last week. Shipments remained strong at 344K RBs for all cotton.
82.5K RBS of sales cancellations were also logged for the report period, up from approximately 65K RBs last week.
Although the on-call sales data from yesterday hinted at a larger than expected net sales on today’s report, cancellations and, obviously, rolling of on-call sales to deferred months offset the healthy increases in on-call sales against May and July.
May 14 closed lower again today, per our expectations, giving up 26 points on the day to settle at 87.65. The settlement was within the lower one quarter of today’s very tight 89 point trading range (87.46 – 88.25).
Technical bias for the front month has turned bearish, per the last two day’s trading action. And, our proprietary analyses support the current standard technical picture.
For tomorrow, our directional call for the front month is…
