Cotton futures scale 2014 peak
According to a NASDAQ Report, cotton for December delivery rose 2.1 per cent to end at 75.83 cents a pound on the ICE Futures U.S. exchange, the highest since June 24, 2014. Cotton has been a star performer this year among commodities.
According to a NASDAQ Report, cotton for December delivery rose 2.1 per cent to end at 75.83 cents a pound on the ICE Futures U.S. exchange, the highest since June 24, 2014. Cotton has been a star performer this year among commodities. Prices are up 20 per cent year-to-date following an upward revision by the USDAâ€™s forecast for the US exports of the fibre along with a drop in its estimate of stocks in India. â€œThe market is now likely to be in deficit for a second consecutive season,â€ Capital Economics said in a note. â€œAlthough we would caution that stocks remain high.â€
The world is estimated to be sitting on approximately 91 million bales of cotton in stockpiles, according to government estimates. Each bale weighs 480 pounds. More than half the worldâ€™s stockpiles are held by China, which has been auctioning the fibre into its local market. China plans to increase its daily offer rate of 30,000 tonne a day in September.
Meanwhile, according to an International Cotton Advisory Committee (ICAC) Report, international cotton prices jumped to over 80 cents/lb in the second half of July 2016 from an average of 70 cents/lb for the rest of the season. Significantly lower crops in the five largest producing countries and higher than expected demand led to tighter stocks at the end of 2015-16, at which time world ending stocks were estimated to have fallen by 12 per cent to 19.7 million tonne. Stocks outside of China decreased by 9 per cent, to 8.4 million tonne, which is the lowest level since 2010-11, when they reached 8.3 million tonne. Furthermore, strong demand in China has reduced its national stocks by 12 per cent, to 11.3 million tonne.