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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


Notes
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.

Price


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
,998
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
Bullish.
Keep in mind that while this is a weekly letter, I can easily change my mind in 24 hours.


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