The US cotton sales should surge as buyers in Asia and Turkey booked orders once prices for the fibre fell sharply, cotton brokers said Wednesday.
They said the weekly USDA export sales report due out Thursday would show US net upland cotton sales ranging from 350,000 to 600,000 running bales (RBs, 500-lbs each), against sales last week of 283,900 RBs.
"You're going to see a big number on sales," said a broker in Texas, the top growing state in the country.
The bulk of the buying nearly two weeks ago was made late and did not make it into the last USDA sales report. Brokers believed that most of the purchasing made by China, Pakistan and India. Turkey was also a notable buyer of American fiber.
If sales reach above 635,000 RBs, that would be the second highest total in the 2003/04 marketing year (August/July). The peak for this season in US net upland cotton sales was reached at the end of October 2003 when 1.428 million RBs were sold, according to USDA figures.
Analysts will be paying close attention to purchases by China, which emerged as a big buyer of American cotton after its crop was damaged by poor weather.
According to the USDA, the Chinese have bought 3.321 million RBs of US upland cotton, against 768,100 RBs bought at this time last year.
Brokers said one of the things they'll be looking at in current sales is whether some of the orders were made by foreign mills which washed out of their contracts and took any penalty so they could buy cheaper cotton.
"If you bought cotton at 75 cents, it would be tempting to get cotton at this level," a broker in the south-eastern United States said.
The benchmark March cotton contract settled Tuesday down its 3.00-cent limit at 64.96 cents per lb on the New York Board of Trade.
Separately, the brokers said US cotton shipments will likely reach between 300,000 and 330,000 RBs, from 320,400 RBs in last week's report.
A little over half of the 9.241 million RBs in total US upland cotton sales booked so far has been shipped, according to USDA figures.
"We're still watching sales, but we will soon be paying closer attention to the pace of shipments because we will not reach the USDA target in (US cotton) exports if we do not put the cotton on the ships and get them to our customers," a dealer said.
In its monthly supply/demand report, USDA forecast US cotton exports in 2003/04 at a record 13.2 million (480-lb) bales. Last year, exports hit a then record 11.9 million bales.
Comments
Comments are closed.