Shipments of Upland were 261,600 RB and 4,000 RB of Pima. The primary destinations of Upland were China (105,700 RB); Turkey and Mexico. Japan (1,600 RB); India and Pakistan were the primary destinations for Pima shipments.
The U.S. Department of Commerce announced Thursday that U.S. textile mills consumed cotton at estimated 4.9 million bales on an annualized basis during August. This was 300,000 bales lower than the year ago usage.
Consumption for July was revised downward to 4.9 million bales, 100,000 bales lower than earlier estimated. USDA has estimated domestic consumption will total 4.6 million bales during the twelve month 2007-08 marketing season.
Certificated stocks are beginning to rebuild now that the harvest season is underway. Stocks now total 513,750 bales with another 41,187 bales awaiting review by USDA. Unfixed call sales (futures contracts to be bought to settle price fixations) and unfixed call purchases are coming somewhat in line for the December contract with about 15,200 unfixed call sales and 12,000 unfixed call purchases. Thus, the market will not find any potential bullish news from those fundamentals.
Look for the December contract to remain very volatile from now until its expiry. The current volatility for December is 28.5 percent. The grains and oilseed markets will continue to overshadow the cotton market.
Yet, with the 2008-08 world cotton stocks to use ratio expected to fall to itslowest level in fourteen years, at 40.3 percent, the May and July contracts will see upward momentum once December futures goes off the board.
marketing@alchempro.com
