After a few volatile sessions over the last month, the market cooled down this week closing at 64.65 c/lb, down only 34 points.
The market is now in a wait and see mood as there are some pending issues that need to be finalized globally. The US/China trade war continues to provide positive signals but will wait for the phase one signing before any real confidence can be renewed. Boris Johnson continues to push for a Brexit on 31st October but it seems the chances of that are more and more unlikely.
There are strong rumors that the CCI in India will be gearing up to purchase local cotton after Diwali. The rains continue in India which is not normal for this time of year, creating fear that the qualities will be affected. In Pakistan we see a similar story, the crop there is now predicted to be only 8.8 million bales due to excessive drought, and will be their lowest production for many years.
This has resulted in Pakistan continuing to purchase aggressively, everything from West African to Brazil cotton. Other than Pakistan, enquiries have been very thin on the ground, India will close for Diwali next week and Bangladesh has also been quiet though with the odd sporadic enquiry. There have also been rumours of China making substantial purchases of Brazilian cotton over the course of the week, some estimates in the region of 200k MT rumored to have been bought.
The market seems to have found its level at 65 c/lb, not being able to break out in either direction over the last few sessions. Long term with the supply channel looking strong prices could ease from here but with the odd spike if there is continued positive news stories on the US/China trade deal.
Πηγή: Mambo