By admin       2018-10-15

New export sales are improving, although the numbers are camouflaged. Total weekly sales are beginning to increase, but “net” total sales are weak because cancellations by China bring the “net” sales down. Sooner or later, other countries will pick up the slack currently left by China’s cancellations. Additionally, China will in fact come to the U.S for cotton. They will have to or either trim their spinning industry or turn to spinning low quality cheap yarns, something they have heretofore avoided at all costs. Notably, the export cancellations by China are being rebooked for the 2019-20 season, as opposed to outright cancellations. Does that mean the Chinese tariff battle will be over by then? Let’s hope it does not linger than long, but it could. A final note, the back end of the 2018-19 contracts are becoming lopsided with on-call sales. That is, there is a baby bull in the pen somewhere. Technically, the market has improved to just a “weak sell” compared to last week’s strong sell. The price outlook is improving. Eighty-cent-plus cotton is coming into the mainstream.

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