The report of US Ministry of Agriculture, issued on November 11, did not drastically change the situation at cotton market. The following points were reconsidered:
1. Global production has reduced by 300 ths. bales, or from 124.186 mln. to 123.888 mln. This happened due to less production in the USA.
2. Another key factor is global cotton consumption. It has also been reconsidered to reduction, by 100 ths. bales in Mexico and Thailand.
3. Import and export have dropped by 200 ths. bales each. Turkey has played a major role in import reduction by 100 ths. bales, whereas export reduction has been mostly influenced by the USA, whose forecast has dropped by 200 ths. bales.
4. Despite fewer stocks in the USA, they have risen globally. This has resulted into the increase of global transit stocks by 130 ths. bales.
Such minor changes at cotton market give ground to assume that the price will maintain within a wide flat zone of 96-105 dollars per bale.
This week, despite negative background and down trends at global markets, cotton market managed to close the session at a high rate. This happened when news came about increased demand in China, which replenishes its stocks. Another positive aspect is the fact that China is considering reduction of its crop area.
Weekly harvesting report has shown that 79 % of crop has been gathered, in comparison to 70 % last week and 76 % last year. A 10-year average for this time of year amounts to 69 %. Positive Thursday report supports the market. According to it, export sales have reached 1.022 mln. bales. Therefore, only 54 ths. bales are to be exported during the week in order to reach USDA forecast.
