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The Cotton Club Letter - For Week Ending 12/16/2016 | SterlingTerrell.net

The Cotton Club Letter - For Week Ending 12/16/2016



  Price Picture
Chart Source: Barchart.com


Trend Picture
Chart Source: Barchart.com


Notes
Nearby contract closed approximately 24 points lower
this week.

Managed money is net long.
Short-term, technical traders see possible support around 70
.20, possible resistance around 72.00.
The trend is up.

Price
Mar-17 is at:   71.04        Volume = 11,481  (For Friday)
May-17 is at:  71.32         Volume = 3,036
July-17 is at:   71.42         Volume = 1,474
Cotlook 'A' Index is at: 80.20

Cash Sales

Recently, on 1,470 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 66.84.
On the nearby contract, that puts the average basis at approximately-420 points.
Cash prices are averaging approximately 13.68 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 77
,265
US Net Upland Export Sales (2016/2017) = 311,700
     Vietnam was the big buyer at 89,700. 

Current World Balance Sheet (2016/2017)
Beginning Stocks: 96.80 (million 480 lb. bales)
Production: 104.24
Mill Use: 111.91
Ending Stocks: 89.15
Ending Stocks/Mill Use Ratio: 79.7


Current China Balance Sheet (2016/2017)
Beginning Stocks: 58.20 (million 480 lb. bales)
Production: 21.00
Mill Use: 35.75
Ending Stocks: 47.85
Ending Stocks/Mill Use Ratio: 133.8%

Current India Balance Sheet (2016/2017)

Beginning Stocks: 10.94 (million 480 lb. bales)
Production: 27.00
Mill Use: 23.75
Ending Stocks: 11.79
Ending Stocks/Mill Use Ratio: 49.6%

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.8 (million 480 lb. bales)
Production: 16.52
Mill Use: 3.50
Ending Stocks: 4.80
Ending Stocks/Mill Use Ratio: 137.1%

Producer / Merchant
    Long:  18,936  (Contracts)
    Short: 188,062
Swap Dealers
    Long:  60,767
    Short:  11,508
Managed Money
    Long:  92,141
    Short:  9,146
Other Reportables
    Long:  37,075
    Short:  11,866

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 The Last: 10 Points on the ICE Cotton #2 Chart(CT)


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