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The Cotton Club Letter - For Week Ending 10/29/2016 | SterlingTerrell.net

The Cotton Club Letter - For Week Ending 10/29/2016



  Price Picture


Chart Source: Barchart.com


Trend Picture


Chart Source: Barchart.com


Notes
Nearby contract closed approximately 175 points higher
this week.

Managed money is net long.
Short-term, technical traders see possible support around 68
.00, possible resistance around 72.00.
The trend is up.

Price
Dec-16 is at:   70.82        Volume = 16,453
Mar-17 is at:   71.26        Volume = 6,708
May-17 is at:  71.52         Volume = 1,417
Cotlook 'A' Index is at: 78.65

Cash Sales

Recently, on 8,663 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 68.61.
On the nearby contract, that puts the average basis at approximately-221 points.
Cash prices are averaging approximately 14.58 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 27
,889
US Net Upland Export Sales (2016/2017) = 128,300
     China was the big buyer at 24,000. 

Current World Balance Sheet (2016/2017)
Beginning Stocks: 96.60 (million 480 lb. bales)
Production: 102.69
Supply: 199.29
Mill Use: 112.03
Ending Stocks: 87.35
Ending Stocks/Mill Use Ratio: 77.9


Current China Balance Sheet (2016/2017)
Beginning Stocks: 58.20 (million 480 lb. bales)
Production: 21.00
Imports - Exports: 4.4
Supply: 83.60
Mill Use: 35.50
Ending Stocks: 48.10
Ending Stocks/Mill Use Ratio: 135.5%

Current India Balance Sheet (2016/2017)

Beginning Stocks: 10.94 (million 480 lb. bales)
Production: 26.50
Imports - Exports: -2.4
Supply: 35.04
Mill Use: 24.00
Ending Stocks: 11.04
Ending Stocks/Mill Use Ratio: 46.0%

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.8 (million 480 lb. bales)
Production: 16.03
Imports - Exports: -11.99

Supply: 7.84
Mill Use: 3.50
Ending Stocks: 4.30
Ending Stocks/Mill Use Ratio: 122.9%

Producer / Merchant
    Long:  28,240  (Contracts)
    Short: 170,816
Swap Dealers
    Long:  65,183
    Short:  5,598
Managed Money
    Long:  78,732
    Short:  14,074
Other Reportables
    Long:  31,926
    Short:  21,880

Cotton Club Letter Price Model:  Current Price Is Subscription Only
regression model
, like the one located here can give insight into how prices, on average, would react given a change in one or more fundamental supply or demand factors. A proper interpretation of this price model would be: 


"Over the last number of years, if cotton supply and demand were at their current levels, we would - on average - expect the US price of cotton to be approximately:  X cents."


*Note - This model does not attempt to forecast the future direction or level of cotton prices. 

General View
Bullish.
Keep in mind that while this is a weekly letter, I can easily change my mind in 24 hours. 


Click Here to Read: "10 Points on the ICE Cotton #2 Chart(CT) - Week Ending 10/28/2016" 


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The Cotton Club Letter Archive can be found by clicking, here