Trend indicators are still bearish, especially the 9 day exp average, and a close above this mark may well open the door for a broader correction towards 51-52 cent range.
Weekly ECOM China Recap: Chinese domestic prices have taken a hit over the last week, remaining weak in both spot cash prices, the CNCE and the ZCE exchange prices. Added weakness has been infused by the recent drop in NY futures prices.
Domestic prices all gapped lower after last weeks October week holiday as the effects of both a confirmed excess stock situation as well as the current large supply of both consignment inventories as well as import quotas pending combine to pressure the local markets.
The USDA has now concurred with the Chinese Cotton Association production estimate of 6.346 million tons, which is dramatically above early estimates which were closer to 6.1 million tons.
Most domestic traders in China feel that for now prices have come down far enough for mills to do substantial business both for domestic and import cotton.
marketing@alchempro.com
