The Cotton Club Letter - For Week Ending 2/3/2017 | SterlingTerrell.net

The Cotton Club Letter - For Week Ending 2/3/2017

  Price Picture
Chart Source: Barchart.com

Trend Picture
Chart Source: Barchart.com

Nearby contract closed approximately 156 points higher
this week.

Managed money is net long.
Short-term, technical traders see possible support around 76
.20, possible resistance around 77.00.
The trend is up.

Mar-17 is at:   76.41        Volume = 20,700
May-17 is at:  77.07         Volume = 14,293
July-17 is at:   77.77         Volume = 5,629
Cotlook 'A' Index is at: 85.75

Cash Sales

Recently, on 3,797 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 71.40.
On the nearby contract, that puts the average basis at approximately-501 points.
Cash prices are averaging approximately 18.38 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 205
US Net Upland Export Sales (2016/2017) = 328,700
     India was the big buyer at 52,500. 

Current World Balance Sheet (2016/2017)
Beginning Stocks: 96.89 (million 480 lb. bales)
Production: 105.34
Mill Use: 111.76
Ending Stocks: 90.65
Ending Stocks/Mill Use Ratio: 81.1

Current China Balance Sheet (2016/2017)
Beginning Stocks: 58.20 (million 480 lb. bales)
Production: 22.00
Mill Use: 36.25
Ending Stocks: 48.35
Ending Stocks/Mill Use Ratio: 133.4%

Current India Balance Sheet (2016/2017)

Beginning Stocks: 10.94 (million 480 lb. bales)
Production: 27.00
Mill Use: 23.25
Ending Stocks: 12.09
Ending Stocks/Mill Use Ratio: 52.0%

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.8 (million 480 lb. bales)
Production: 16.96
Mill Use: 3.30
Ending Stocks: 5.00
Ending Stocks/Mill Use Ratio: 151.5%

Producer / Merchant
    Long:  21,354  (Contracts)
    Short: 199,689
Swap Dealers
    Long:  60,836
    Short:  4,408
Managed Money
    Long:  105,881
    Short:  11,740
Other Reportables
    Long:  31,635
    Short:  14,345

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


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

If this was forwarded to you and you'd like to sign up, email me at sterlingterrellAToutlookDOTcom with "Cotton Club" in the subject line.
Email with "Stop Cotton" in the subject line to be removed.