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The Cotton Club Letter - For Week Ending 11/11/2016 | SterlingTerrell.net

The Cotton Club Letter - For Week Ending 11/11/2016



  Price Picture
Chart Source: Barchart.com


Trend Picture
Chart Source: Barchart.com


Notes
Nearby contract closed approximately 9 points lower
this week.

Managed money is net long.
Short-term, technical traders see possible support around 68
.00, possible resistance around 69.50.
The trend is up.

Price
Dec-16 is at:   68.44        Volume = 42,865
Mar-17 is at:   69.03        Volume = 39,856
May-17 is at:  69.70         Volume = 7,597
Cotlook 'A' Index is at: 77.20

Cash Sales

Recently, on 660 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 68.71.
On the nearby contract, that puts the average basis at approximately+27 points.
Cash prices are averaging approximately 12.68 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 46
,768
US Net Upland Export Sales (2016/2017) = 168,800
     Indonesia was the big buyer at 24,000. 

Current World Balance Sheet (2016/2017)
Beginning Stocks: 96.91 (million 480 lb. bales)
Production: 103.28
Mill Use: 111.99
Ending Stocks: 88.31
Ending Stocks/Mill Use Ratio: 78.9


Current China Balance Sheet (2016/2017)
Beginning Stocks: 58.20 (million 480 lb. bales)
Production: 21.00
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: 27.00
Mill Use: 24.00
Ending Stocks: 11.54
Ending Stocks/Mill Use Ratio: 48.1%

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.8 (million 480 lb. bales)
Production: 16.16
Mill Use: 3.50
Ending Stocks: 4.50
Ending Stocks/Mill Use Ratio: 128.6%

Producer / Merchant
    Long:  27,829  (Contracts)
    Short: 168,851
Swap Dealers
    Long:  62,696
    Short:  5,829
Managed Money
    Long:  78,034
    Short:  14,043
Other Reportables
    Long:  31,413
    Short:  19,870

Cotton Club Letter Price Model:  Current Price Is Available By 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 11/11/2016" 


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