Futures prices were called to open around 20 lower this morning as it appears—despite the healthy export sales report that there was very little export demand at current, and that perhaps Chinese mills are in even less hurry to buy than even the most pessimistic had estimated.
Prices came in around 40 lower, pressured by spec selling and local long liquidation from yesterday. Prices spent the rest of the session under pressure, but confined to a fairly tight range. Spreads actually narrowed, especially between the Dec / March which traded from a 380 settlement into 355.
The matter of fact is that the local floor traders have a ridiculously sized bear spread in the Dec / March and this easing was more of a squeeze on their positions. Prices stayed in negative territory all session, eventually closing with losses of 20-53 points.
Estimated volume was quite light at 8,875 lots. Today's US export sales and shipments again showed robust sales at a combined 227,800 bales of upland and Pima. Turkey was the best buyer with 51,400, followed by Salvador with 32,800 bales. Shipments were again light at 77,600 lots.
At the current rate of shipments and sales, the USDA export estimate of 16.2MB is looking at least 2MB too optimistic.
This afternoon Cotton Outlook sent out some revised Supply and Demand figures that are sure to ripple the established ( USDA especially ) thinking on current crop. The body adopted the China Cotton Associations'estimate of 06/07 production at 6.34 million tones.
marketing@alchempro.com
