Daily Market Report : July 30, 2010
INDICATIVE FIXED BALE PRICING OPTIONS - July 30, 2010
| 2011 | 2012 | 2013 |
|---|---|---|
| 75.80 | 72.53 | 72.73 |
| $436 | $434 | $452 |
All cotton contract offers based on Middling 1-1/8" (31-3, 36) 3.5 - 4.9 Mic, 500 lb/Bale, Ex-Gin
14 Day Payment Terms
All prices quoted are exclusive of GST. This report is prepared from information supplied to Queensland Cotton. No responsibility is accepted by Queensland Cotton or its employees for the accuracy of the report. Basis quotes may differ from the cash price basis equivalent.
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Cotton prices probed the upside again last night making new highs before losing ground by the close. However unlike Wednseday night, prices managed to hold enough of the gains to settle higher on the day. Trading volumes remained modest with estimated futures volume of 11,658 contracts. Cotton seemed to glean support from outside markets as a weaker US dollar and stronger grain pits helped boost cotton near the option ring opening. Grains continued yesterdays bull run on drought fears developing in Russia. As for other cotton specific news, traders reported a slight pick-up in export demand overnight for just about any origin. Todays US Export Sales report shows cotton continues to sell at a good pace. Total sales for the next marketing year now stand at 3.44 million running bales, including Pima. Carryover sales from the current marketing year are likely to add another 1.5 to 1.7 million bales on top of that bringing sales to start next marketing year at nearly 5.0 mb. Given this, shippers are keen to get their hands on US new crop as soon as possible. Following weeks of speculation, Thursday afternoon China announced plans to re-release surplus government reserves of cotton into the market in order to contain soaring domestic prices. The government plans to gradually sell up to 600,000 tons of 2008 state reserves of cotton starting as early as next week at an initial floor price of 16,500 yuan per ton ($1.10/lb).
Fragile sentiment last night particularly in the US, saw a third day of losses for the S&P 500. The USD struggled to gain traction as markets fret over the strength of the US rebound and this helped the Euro to 12-week highs. There is plenty of US data to absorb over the coming sessions with another payrolls on approach next Friday. Aud/usd is riding back above 0.9000 helped by the resurgent Euro and also analysis from some quarters that a further rate rise from the RBA may not be so far off, despite Wednesday's CPI data and an expectation that price gains will accelerate in the second half of 2010.