Construction of a Gildan yarn-spinning plant in North Carolina expected to begin soon. Domestic mills once provided the largest and most dependable market for U.S. cotton.
Cotton futures tumbled to a triple-digit loss in spot July Wednesday, snapping a four-session string of higher closes and finishing just below the prior dayΆs low.
July shed 128 points to settle at 86.08 cents, near the low of its 190-point range from up 46 points at 87.82 cents to down 144 points to 85.92 cents. It settled on its lowest close since last Wednesday.
December closed off 22 points at 77.88 cents, just above the midpoint of its 111-point range from up 23 points at 78.33 to down 88 points at 77.22 cents.
Volume slowed to an estimated 29,200 lots from 33,473 lots the previous session when spreads accounted for 14,073 lots or 42%, EFP 200 lots and EFS 31 lots. Options volume totaled 5,048 calls and 5,766 puts.
Montreal-based branded basic apparel maker Gildan Activewear Inc. soon will begin construction on its new yarn-spinning plant in Mocksville, N.C., investing $30 million more in the project than was originally announced in 2013, according to a Textile World report.
Gildan now expects to invest $142 million at the site and to break ground in the next few weeks. It has purchased 113 to 114 acres and will increase the size of the plant from 650,000 square feet to 700,000. Once fully operational, the plant is expected to employ about 290 workers.
Other U.S. expansion plans announced previously by Gildan are unaffected by the expanded plans for Mocksville, the report said. The companyΆs first yarn-spinning facility in Salisbury, N.C., began operations in February, and construction on the second Salisbury facility is underway. Also, refurbishment and modernization soon will be completed at GildanΆs plants at Clarkton, N.C., and Cedartown, Ga.
There was a time when domestic mills provided the largest and most dependable market for U.S. cotton. Exports first exceeded domestic mill use in 2001-02 and have done so ever since.
In 1997-98, domestic mills consumed 11.35 million bales, 60% of a total market offtake of 18.85 million bales. Domestic mills this season are expected to consume 3.6 million bales, 26% of a 14-million-bale offtake, and to use 3.7 million bales next season, 28% of an overall demand for 13.4 million bales.
Exports by the United States, the worldΆs leading cotton exporter, are forecast to decline 7% next season to 9.7 million bales, the lowest since 2000-01.
The USDA last month lowered its forecast for exports this season by 300,000 bales to 10.4 million, surprising many in the trade. Scant recent sales cancellations and the pace of shipments had led many to believe the April export estimate would be met.
A report on export sales and shipments for the week ended May 29 is scheduled for release by USDA at 7:30 a.m. CDT on Thursday.
Futures open interest declined 989 lots Tuesday to 188,245, with JulyΆs down 4,933 lots to 95,179 and DecemberΆs up 3,793 lots to 80,152. Certificated stocks grew 112 bales to 411,675. There were 1,331 newly certified bales, 1,219 bales decertified and 5,785 bales awaiting review.
World prices as measured by the Cotlook A Index gained 85 points Wednesday morning to 91.90 cents. The premium to TuesdayΆs July futures settlement narrowed three points to 4.54 cents.
Forward A Index values for 2014-15 dropped 20 points to 85.95 cents, widening the discount to the 2013-14 index by 105 points to 5.95 cents and narrowing the premium to TuesdayΆs December futures close by 24 points to 7.85 cents.
