Cotton: Global Stocks Declining

Cotton, commodity, soft, colonial, spread trading, commodity ebook

Cotton, commodity, soft, colonial, spread trading, commodity ebookRecent data released by USDA (US Department of Agriculture), which have led to a sharp drop in Cotton prices over the past week, are likely to be undermined by falling Australian exports.

The USDA has provided a projection heavy on Cotton's global stock, but now the overall picture would seem ready to change as a result of the damage caused by the recent climatic events we all well know (hurricanes, Harvey and Irma), and which the USDA has not included in its domestic production forecasts.

US officials, we recall it, stunned the markets by increasing 2.46 million bales to a total of 92.5 million billions of Cotton global stocking projections at the end of 2017-2018, but as I wrote above, it is possible that the overall context is subject to sudden mutations as USDA analysts have not included in their forecasts the damage caused by hurricanes' passage.

According to Commerzbank's analysts, in fact, 1 million bales may have been lost, an estimate also substantially shared by Rabobank's staff.

Commerzbank analysts predict a US crop of Cotton of 20 million bales, which actually coincides with a maximum of ten years, but below USDA projections (21.8 million bales).

Abares's figures show a contraction in exports: in detail, there is a decline to 956,000 bales (-583,000 bales compared to the last estimate). In a similar context, characterized by weak Australian and US supplies, USDA projections, outside China, of global stocks (11.9 million bales), could, therefore, turn out to be somewhat smaller.

Seasonalgo, seasonal trading, spread trading, commodity market


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