Daily Market Report : September 03, 2010
INDICATIVE FIXED BALE PRICING OPTIONS - September 03, 2010
| 2011 | 2012 | 2013 |
|---|---|---|
| 89.44 | 79.17 | 75.59 |
| $506 | 466 | 461 |
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 continued to surge higher during last night's session with the spot month December contract gaining 208 points in yet another strong show by the bulls. Support was derived from a number of influences, but the overwhelming feeling is that much of the price action was thanks to the specs and hedge funds who continue to extend their long position. Cotton was the star performer in the commodity complex gaining 2.4% and helping sugar and wheat to post good gains as well. In terms of supportive cotton news there are some concerns about unwelcomed rain in both China and the US (where Hurricane Earl is tracking towards North Carolina and Virginia) resulting in firmer prices in both domestic markets. The weekly export sales and shipment report came and went without much reaction. Sales were much lower than the previous week, but this isn't surprising given strong past sales and increasing prices. The bulls seem to be gaining more and more momentum and confidence as each session passes and it is becoming increasingly difficult to see what may slow the market. The speculators are playing a major role at present and as physical demand and futures prices start to separate traders and the mills are remaining cautious and on the sidelines. With one more session to go it will be interesting to see if prices continue higher or consolidate yesterday's gains. Oh and with so much going on in cotton the suspension of three Pakistani cricket players nearly didn't get a mention.
The Australian Dollar traded a much tighter range during the offshore session as it was contained between 0.9056 and 0.9122 US cents. Sentiment has continued to improve with Wall St closing firmer for the second day. Forex trading was a little quieter as the market looked to consolidate after strong gains on Wednesday. Payrolls data for August will be out tonight in the US which has the potential to rock the boat. The AUD/USD should be supported lower at 0.9030 but 0.9220 remains the topside target for the near term.