Cotton futures have rebounded at the end of last week, after the US Department of Agriculture (USDA) has predicted a slight fall of US cotton areas. Cotton prices had previously shown some weakness on the international market, but also on the Indian domestic market where the rebound of the rupee has curbed export sales.
Cotton futures have rebounded on last Friday in New York, over surprising planting data from the US Department of Agriculture (USDA).
A slight fall of planting intentions in the coming season has boosted cotton prices. Previous planting surveys had been less pessimistic.
Until USDA data have been released at the end of the week, cotton prices had looked slightly weaker than previously observed on the international market.
Far from reaching its next target at 80 cents, the nearby contract had fallen from 77.89 cents on Tuesday down to 75.87 cents on Thursday.
US cotton export sales have however surged 75% in the last week under review at 219,000 metric ton, or a relatively high level.
Demand has been strong from Vietnam, but also from China, whatever the high level of Chinese import tariffs on US cotton.
Demand from Bangladesh is currently depressed by financial issues with domestic banks.
In China, import prices are staying very competitive compared with domestic prices.
Demand for foreign cotton is however rapidly drying up due to a lack of import quotas.
The market is still waiting for the end of trade negotiations with the United States, which are taking much longer than earlier expected and could last for months.
Anticipations of higher prices in the coming weeks are therefore disappearing, as reflected by the falling price difference between March and May contracts on China’s futures market in Zhengzhou.
Source: Emergingtextiles
