Lack of new sales as ginners prefer to wait projecting high demand in early October.

During the week the weather was rainy which was neutral to the cotton fields. In general the crop is developing under normal weather conditions with no replanting reported. Of course the following months are very critical for the plantΆs development so we canΆt make accurate predictions right now. So far it seems that the new crop will be reduced by 15% compared to current crop. This figure may result to 220,000 tons of lint out of which about 5% is already sold basis Dec. Another 8% is the domestic consumption which usually fluctuates depending on the season potentials.

In other words provided our calculations are correct, the unsold balance so far is about 190k tons of lint which is already not a high volume. In addition, by calculating the risk of low yields due to unfavorable weather conditions and less care by growers, this figure may be ever lower. The Spanish crop is already sold by 50% while Turkish crop will be much lower (according to recent estimates).

All these facts are bringing ideas to ginners of a bullish scenario in the beginning of coming crop. Our neighboring clients (Turkish & Egyptian spinners) will be in need of cotton really prompt so demand and basis for the Greek crop will pick up easily. We should also bear in mind that current crop is also sold out. This idea makes ginners more reluctant to new forward sales. Since they have already sold a part of their new production it is more likely that they will proceed with new sales only if basis is better (500 on Dec 13), or market exceeds the 90 c/lb and fix price sales will be seriously considered.