Analysts, warning of a "sense of panic" over export supplies, forecast cotton prices hitting a record $2 a pound, even as most of the fibre's futures complex weakened on Friday.
"It seems only a matter of time before the $2 mark is taken," Commerzbank analyst Eugen Weinberg said. "The price of cotton still only knows one direction."
At Macquarie, Kona Haque also said it was likely that New York cotton futures would reach $2 a pound for the first time.
The comments came as the benchmark March futures gained further ground, standing 0.6% higher at 188.7 cents a pound at 11.15 GMT, after earlier touching a record for a spot contract of 192.63 cents a pound.
However, later lots eased, with the December lot, the benchmark for the next 2011-12 harvest, down 1.5% at 129.50 cents a pound.
Farmer hoarding?
The diverging fortunes of the contracts reflected "the fact that right now, concern is all about the short term", Ms Haque told Agrimoney.com.
American shipments remained strong, with latest weekly export sales coming in at a higher-than-expected 305,000 running bales, a pace that has raised expectations among some investors that US stocks may end 2010-11 below even the 50-year low of 1.9m bales currently forecast.
"There is clearly a sense of panic that this pace [of exports] cannot be kept up," she said.
However, sourcing alternative supplies had got more difficult, with floods damaging the crop in Australia, and India reportedly reluctant to raise export quotas in the face of a slowdown in deliveries from growers.
This decline has been blamed on rains damaging Indian production, although there is growing talk of farmer hoarding, in expectation of higher prices.
Meanwhile, demand remains strong from Chinese mills, which are still enjoying positive margins even after the jump in costs of their main raw material.
Correction ahead?
The high prices are stoking expectations of a rapid rise in sowings in the US, the major exporter, for the forthcoming season.
"Many farmers sold their last crop ahead at 80 cents a pound," Ms Haque said.
"They are keen to take advantage of current prices. They will plant as many acres as they can."
However, Rabobank warned that the world needed a record cotton crop in 2011-12 "just to maintain the current tight fundamentals".
"An inadequate harvest would likely result in continued record highs," the bank said, adding that the likely scenario was for a "correction in prices" later in the year, assuming the next crop avoids weather scares.
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