by Agrimoney.com
Cotton futures have seen a light relief rally into the end of the week, however sentiment remains negative follow the latest "bearish adjustment" by the US Department of Agriculture.
"Global ending stock expectations were revised upwards 2% to a record 94.34 million bales, "noted Rabobank.
The USDA raised its world cotton stocks projection for both 2012/13 and 2013/14 due to a combination of "higher production and lower consumption".
"It is possible that futures can work lower again as demand has turned soft, but production and weather might be more important in the short term," suggests Jack Scoville of PRICE Futures Group.
Mixed China view
"The USDA were muted on China's balance sheet," suggests Rabobank.
China continues to hold record levels of cotton inventories, helping provide a floor to price.
Yet despite record stocks imports are expected to remain close to current levels in the coming season.
View have become more mixed however.
"Whilst it is still too early to anticipate the Chinese Governments import appetite in 2013/14, we maintain a conservative forecast of China's import demand in 2013/14 of 7 million bales," suggest Rabobank.
Steady supplies
Improving weather conditions are supportive for stronger production in the 2013/14 harvest.
"Weather for Cotton appears good in India, Pakistan, and China, noted Jack Scoville
The latest USDA estimates place US production for 2013/14 season unchanged 13.5 million bales.
"We maintain our view on US cotton production at 14 million bales, 500,000 bales above the USDA, and expect the southwest abandonment rate to decline on improving crop conditions," noted Rabobank.
Cotton planting in India, the second-ranked producer and exporter, "continues to gain momentum, given favourable weather and adequate rain over major growing regions", reported the USDA New Delhi bureau this week.
Nonetheless, the bureau stood by a forecast of Indian cotton output up only 500,000 bales year on year at 27.0m bales in 2013-14, citing the appeal to growers of using the better rains to diversify from cotton, one of the more drought tolerant crops.
Weather conditions have also been favourable elsewhere. Cotton planting in India "continues to gain momentum, given favourable weather and adequate rain over major growing regions", reported the USDA New Delhi bureau this week.
No comments:
Post a Comment