The local cotton market remained bullish and the trading volume remained satisfactory during the past week. The low arrival of Phutti resulted in an accumulation of orders with ginners that resulted in bullish sentiments in the market.
The rate of new crops of cotton in Sindh and Punjab ranged from Rs20300 to Rs20500 per maund. The rate of Phutti in Sindh and Punjab also increased to a range between Rs 8800 to Rs 9700 per maund.
The Karachi Cotton Exchange Spot Rate remained unchanged at Rs 20000 per maund. Polyester Fiber was available at Rs 355 per kg.
Meanwhile All Pakistan Textile Mills Association (APTMA) on Thursday urged the government to reinstate the Regional Competitive Energy Tariffs (RCET) for gas at a rate of $9/MMBtu and for electricity at 9 cents/kWh in the upcoming budget. APTMA members are the sole consumers of cotton produced in our country.
The consequences of non-provision of competitive tariffs will be severe and could result in substantial closure of the industrial sector, widespread unemployment, and further depletion of our vital export revenue stream, the trade body warned.
In India, the government has decided to monitor cotton production through satellite.
In the United States cotton futures ended on a high note last week. Outside markets were mixed most of the week but finally settled earlier. The exports from the US were almost unchanged.
The cotton futures had another week of wide trading ranges that ended on a high note. July and December futures traded in a relatively tight range most of the week before the news about the U.S. House of Representatives passing a vote to raise the U.S. debt limit. Upon this news, futures prices went soaring. The market seemingly shrugged off the rain received throughout West Texas this week and instead focused on macroeconomic factors. Additionally, data from China and rumors of decreased production helped spur the rally in the U.S. market. For the week ending June 1, July futures settled at 86.42 cents per pound, up 630 points for the week. December futures settled at 81.58 cents per pound, up 308 points for the week, and settling right in the middle of the long-term trading range. Total open interest gained 4,795 contracts to 197,275 since last Thursday, reaching its highest level since late March.
U.S. stocks had another mixed week but eventually settled higher after the House passed a bill to prevent the U.S. from defaulting on its debt. Weaker-than-expected data from China showed a slowdown in manufacturing, indicating the country’s economy is not faring as well as hoped. On the domestic front, markets found support late in the week from the U.S. ISM prices paid index, which reported a contraction to 44.2, the weakest level in 5 months. U.S. initial jobless claims are still at a low level, with 232,000 filed, lower than market expectations for the week. Despite the strong jobs data, the market latched onto the lower ISM price data and a likely pause in interest rates at the next FOMC meeting. There was buzz early in the week that the Fed would raise interest rates at its meeting on June 13 and 14. The worries weighed on markets, keeping them mixed, but economic data released later in the week showed it to be more disinflationary than anything. The U.S. Dollar made steady gains most of the week but pulled back after the rally in stocks.
Last week U.S. Export Sales were up substantially from the week prior. A net total of 267,800 Upland bales were sold for the 2022/23 crop. The biggest buyer for the week was China, with a massive 221,700 bales purchased. This was followed by Turkey with 20,800 bales, Vietnam with 13,700 bales, Bangladesh with 5,300 bales, and Indonesia with 3,800 bales. Net sales of 76,600 bales were sold of the 2023/24 crop. Although this is unchanged from the previous week, it is lower than what is typically sold during this time of the marketing year. Pima sales were up slightly, with a net total of 3,700 bales sold. Shipments for Pima reached a marketing year high with a total of 26,700 bales exported for the week.
The USDA reported that 60 percent of the cotton crop had been planted. In the Southwest, Texas is the only state lagging from normal places. So far, 50 percent of the crop has been planted in the state, which is slightly below the five-year average of 54 percent. The initial cotton condition report rated 38 percent of the crop in the U.S. as “Fair”, 41 percent as “Good”, and 7 percent as “Excellent”. Stormy weather has moved through West Texas the past week, along with cooler temperatures, and more is in the forecast. The moisture is welcome, and we would rather have rain than drought, but planting in the area will be impacted because of the current conditions. South Texas has had sunny, warmer weather intermingled with scattered storms. The weather has been welcomed and will help push uniform crop development.
While weather, export sales, and crop progress will get plenty of attention, the focus next week will be on the release of the World Agricultural Supply and Demand Estimates (WASDE) report. Additionally, the GSCI Index roll begins next Wednesday, and traders will be focused on how those flows will impact the market.
The rate of new crops of cotton in Sindh and Punjab ranged from Rs20300 to Rs20500 per maund. The rate of Phutti in Sindh and Punjab also increased to a range between Rs 8800 to Rs 9700 per maund.
The Karachi Cotton Exchange Spot Rate remained unchanged at Rs 20000 per maund. Polyester Fiber was available at Rs 355 per kg.
Meanwhile All Pakistan Textile Mills Association (APTMA) on Thursday urged the government to reinstate the Regional Competitive Energy Tariffs (RCET) for gas at a rate of $9/MMBtu and for electricity at 9 cents/kWh in the upcoming budget. APTMA members are the sole consumers of cotton produced in our country.
The consequences of non-provision of competitive tariffs will be severe and could result in substantial closure of the industrial sector, widespread unemployment, and further depletion of our vital export revenue stream, the trade body warned.
In India, the government has decided to monitor cotton production through satellite.
In the United States cotton futures ended on a high note last week. Outside markets were mixed most of the week but finally settled earlier. The exports from the US were almost unchanged.
The cotton futures had another week of wide trading ranges that ended on a high note. July and December futures traded in a relatively tight range most of the week before the news about the U.S. House of Representatives passing a vote to raise the U.S. debt limit. Upon this news, futures prices went soaring. The market seemingly shrugged off the rain received throughout West Texas this week and instead focused on macroeconomic factors. Additionally, data from China and rumors of decreased production helped spur the rally in the U.S. market. For the week ending June 1, July futures settled at 86.42 cents per pound, up 630 points for the week. December futures settled at 81.58 cents per pound, up 308 points for the week, and settling right in the middle of the long-term trading range. Total open interest gained 4,795 contracts to 197,275 since last Thursday, reaching its highest level since late March.
U.S. stocks had another mixed week but eventually settled higher after the House passed a bill to prevent the U.S. from defaulting on its debt. Weaker-than-expected data from China showed a slowdown in manufacturing, indicating the country’s economy is not faring as well as hoped. On the domestic front, markets found support late in the week from the U.S. ISM prices paid index, which reported a contraction to 44.2, the weakest level in 5 months. U.S. initial jobless claims are still at a low level, with 232,000 filed, lower than market expectations for the week. Despite the strong jobs data, the market latched onto the lower ISM price data and a likely pause in interest rates at the next FOMC meeting. There was buzz early in the week that the Fed would raise interest rates at its meeting on June 13 and 14. The worries weighed on markets, keeping them mixed, but economic data released later in the week showed it to be more disinflationary than anything. The U.S. Dollar made steady gains most of the week but pulled back after the rally in stocks.
Last week U.S. Export Sales were up substantially from the week prior. A net total of 267,800 Upland bales were sold for the 2022/23 crop. The biggest buyer for the week was China, with a massive 221,700 bales purchased. This was followed by Turkey with 20,800 bales, Vietnam with 13,700 bales, Bangladesh with 5,300 bales, and Indonesia with 3,800 bales. Net sales of 76,600 bales were sold of the 2023/24 crop. Although this is unchanged from the previous week, it is lower than what is typically sold during this time of the marketing year. Pima sales were up slightly, with a net total of 3,700 bales sold. Shipments for Pima reached a marketing year high with a total of 26,700 bales exported for the week.
The USDA reported that 60 percent of the cotton crop had been planted. In the Southwest, Texas is the only state lagging from normal places. So far, 50 percent of the crop has been planted in the state, which is slightly below the five-year average of 54 percent. The initial cotton condition report rated 38 percent of the crop in the U.S. as “Fair”, 41 percent as “Good”, and 7 percent as “Excellent”. Stormy weather has moved through West Texas the past week, along with cooler temperatures, and more is in the forecast. The moisture is welcome, and we would rather have rain than drought, but planting in the area will be impacted because of the current conditions. South Texas has had sunny, warmer weather intermingled with scattered storms. The weather has been welcomed and will help push uniform crop development.
While weather, export sales, and crop progress will get plenty of attention, the focus next week will be on the release of the World Agricultural Supply and Demand Estimates (WASDE) report. Additionally, the GSCI Index roll begins next Wednesday, and traders will be focused on how those flows will impact the market.