NY cotton futures fell four straight sessions before pulling back up Friday, ending the week lower by dropping 134 points in the spot May contract month.
Monday’s weaker session set the tone for this week’s trading as USDA released its first planting intention report for the 2014/2015 crop year. The U.S. farmers say they intend to plant more cotton than last year, pegging the acreage at 11.1 million acres, 6.7% higher than last year.
The report was in line with expectations, and NY cotton futures dropped slightly after the report release. Market eased further Thursday on a disappointing export report as mills are not eager to buy at the current market price.
Both exports and shipments dropped from the previous week, with sales for upland and pima cotton totaled at less than 50k running bales. China is eying to overhaul the stockpiling program set up by the country in 2011, which drove demand for world cotton by its textile industry.
The impact of the program overhaul on the world market price is yet to be seen, but it’s expected to encourage mills to switch focus to reserve auction due to price discount and quota award, thus curbing demand for world cotton imports.
The reserve auction is well under way after the government lowered the reserve selling price. Close to 80% of the offered stocks were sold on the very first day of the auction, double the rate in the last round of sales.
Source:
http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=161796
