July Contract to Deal with 10% of the 2007/08 Carryout
Cotton prices zig zagged lower last week, making new recent lows before attempting to form an encouraging double bottom as April came to a close on Wednesday. For the month of April, July lost 163 points while Dec gained 40 points. However, cotton lost 24,670 in open interest last month which brought the two month…
Egytex News Desk
Egytex
Certificated stocks have posted record highs every single session since March 27th. As the week came to an end there were potentially 1,355,759 bales eligible for delivery. It would now look as if the May contract will take care of less than 400,000 bales. So it doesn’t take much imagination to believe that the July contract will have to deal with a million bales or ten percent of the 2007/08 carryout.
The export sales report this past week provided glimmers of hope although it certainly didn’t help the market Thursday. This weeks report, the biggest of the year, showed an impressive 640,000 bales sold to an equally impressive 20 different destinations. However, sales are not the problem. All we need to do is sell an average of about 160,000 bales to meet USDA’s hopes. The fact that much of the US cotton is still being sold at bargain basement, fire-sale prices to raise capital. This would indicate that the fallout and damage from the horrendous market conditions the first week of March, is not only still with us but will probably be so for some time to come.
Source: Swiss Financial Services
From the Egytex news archive, first published on 5 May 2008. Figures and names are as reported at the time.
