The Cotton Club Letter - For Week Ending 11/5/2016 | SterlingTerrell.net

The Cotton Club Letter - For Week Ending 11/5/2016

  Price Picture

Chart Source: Barchart.com

Trend Picture

Chart Source: Barchart.com

Nearby contract closed approximately 229 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.

Dec-16 is at:   68.53        Volume = 14,221
Mar-17 is at:   69.10        Volume = 9,119
May-17 is at:  69.68         Volume = 1,203
Cotlook 'A' Index is at: 77.50

Cash Sales

Recently, on 4,809 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 67.68.
On the nearby contract, that puts the average basis at approximately-85 points.
Cash prices are averaging approximately 13.43 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 39
US Net Upland Export Sales (2016/2017) = 160,400
     China was the big buyer at 29,800. 

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:  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 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
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 11/4/2016" 


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