The Cotton Club Letter - May 2017 | SterlingTerrell.net

The Cotton Club Letter - May 2017

  Price Picture
Chart Source: Barchart.com

Trend Picture
Chart Source: Barchart.com

Nearby contract closed approximately 1691
points higher over the last 30 days.
Managed money is net long.
Short-term, technical traders see possible support around 76.00, possible resistance around 80.00.
The trend is up.


July-17 is at:   79.45         Volume = 21,076
Dec-17 is at:   73.45          Volume = 8,769
Mar-18 is at:   73.00          Volume = 1,097
Cotlook 'A' Index is at: 89.65

Cash Sales

Recently, on 6,669 bales traded, the trading platform TheSeam.com reported an average cash price of approximately: 79.55.
On the nearby contract, that puts the average basis at approximately-194 points.
Cash prices are averaging approximately 25.87 cents over loan value.

Stocks and Sales
ICE Certified Cotton Stocks = 402
US Net Upland Export Sales (2016/2017) = 120,700
     Vietnam was the big buyer at 51,600. 

Current World Balance Sheet (2017/2018)
Beginning Stocks: 89.52 (million 480 lb. bales)
Production: 113.22
Mill Use: 115.75
Ending Stocks: 87.14.91

Current China Balance Sheet (2016/2017)
Beginning Stocks: 48.70 (million 480 lb. bales)
Production: 23.50
Mill Use: 37.50
Ending Stocks: 39.65

Current India Balance Sheet (2016/2017)

Beginning Stocks: 11.99 (million 480 lb. bales)
Production: 28.00
Mill Use: 24.00
Ending Stocks: 13.24

Current USA Balance Sheet (2016/2017)
Beginning Stocks: 3.2 (million 480 lb. bales)
Production: 19.20

Mill Use: 3.40
Ending Stocks: 5.00

Producer / Merchant
    Long:  18,113  (Contracts)
    Short: 193,370
Swap Dealers
    Long:  65,919
    Short:  5,960
Managed Money
    Long:  113,034
    Short:  6,608
Other Reportables
    Long:  23,694
    Short:  20,101

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.