Focus now moves to the March contract which has been under pressure this week, settling at 64.01 c/lb.
The reporting on the trade war was hugely inconsistent over the week. On Wednesday it was reported that a phase one deal might not be signed in 2019, which pushed the market 100 points down. Since then news has been more friendly but without any real conviction.
There is not a huge amount of cotton around for nearby shipments. Brazil seems to be well sold with increasing pressure on the ports there to ship the crop out on time to meet contracts. The US is still not quite ready and the West African will not begin again properly until January.
Indian is the most attractively priced cotton at the moment, whilst also being the most readily available, with offerings of Shankar 6 at around 71-72 c/lb level, though issues on quality there remain. That said, Bangladesh has been buying the Indian aggressively over the last couple of weeks.
West African suppliers have again been in the market this week, though with the drop in ICE they have not been attracted to sell based on the flat price. The basis continues to be very strong at origin, not aligned with the level at which it is able to be sold at destination. Estimates are that WAF still has another 500k to 600k left to sell of new crop.
It continues to be a market very sensitive to trade war news, with rumors and reports moving the market one way of the other. The dispute continues to stifle investment and disrupt supply chains, it’s conclusion will be welcome, we just don’t know when that will be.
Source: Mambo