This week (Dec. 11 so far), the New York cotton futures rose slightly, the March contract rose 86 points to close at 44.46 cents a pound, the December 2009 contract rose 80 points to close at 49.00 cents a pound.

Today, the U.S. Department of Agriculture supply and demand report for the bad performance, but the period of the current market price of cotton has to digest some of the bad factors. For example, although the United States Department of Agriculture report on the world cotton consumption reduction package 2,700,000, but consumption is still in the package 116,600,000, or the world than the output of more than 111.6 million package of 500 million bales. If the output gap exists, then, the market volume will naturally not be so frustrating.

We do not blame the United States Department of Agriculture reduced consumption is too slow because the U.S. Department of Agriculture must be dropped before the data to see solid evidence. The market’s rapid response to the report, we have heard many of the civil assessment that the current cotton consumption will not pack more than 105,000,000. In view of the textile business in recent weeks has been very slow, it is difficult to challenge this data in such a difficult economic environment, the cotton consumption to reduce the number of in the end, have to go through after a few months in order to more clearly.

The U.S. Department of Agriculture report, including a significant adjustment, India reduced production (-100 million bales), as well as reduced production in Brazil (-45 million bales), Pakistan and increase production 400,000 package. In cotton consumption in China to reduce the consumption of 1,500,000 packets, followed by India, 50 million bales, Pakistan reduced by 20 million bales, Turkey reduced by 20 million bales. In recent years, these countries is a major importer of U.S. cotton country. As a result, no surprise, the United States exports down 750,000 bags, to pack 12,250,000. This may still be too optimistic.

This morning, according to the latest weekly U.S. export sales last week, Pima and upland cotton sales of the new package only 113’700, the total sales this year, about 7,700,000 package (Statistical Package weight). Problems in exports, so far only 4,400,000 bags, many of the import market has become very calm, we do not know that between now and by the end of July, the United States to re-export market which 7,850,000 bales of cotton? China basically out of the market, export 12,250,000 package seems to be very difficult to predict completed.

Due to poor sales prospects, the strength of the market seems to be questionable, but there are a number of factors contributed to the market’s rebound. One of them, AWP (adjusted world price of cotton) is no longer the current decline, as the world’s second largest cotton exporting countries of the Government of India to buy millions of bales of cotton. In addition, the new U.S. government loan of cotton out of the very slow pace, world market prices have not the face of pressure. Even though not a large number of textile procurement, exports in the near future need some short covering is enough for the time being on foreign support for cotton prices.

AWP next week will be down 278 points, fell to 35.52 cents from 38.30 cents Wednesday morning as the price of 35.86 cents. As the market rebound today, so tomorrow we expect the new AWP price 36.25 – 36.50 cents. Based on these prices, we can expect, when the March contract transaction price is higher than 45-46, the trade will be selling more apparent.

There is also a cotton goods and role play a positive factor is the weakening of the dollar, the U.S. dollar from November 20 has decreased by about 5%, looking at the technical indicators continued to fall curve will be very sorry about that. We have long insisted that the U.S. is a need for close observation of no use of the card, because the weak dollar will be converted to strong commodity prices. Perhaps, the market eventually be able to understand the truth, that is, from a long line, with trillions of dollars to save the U.S. economy is not good.

Well, now, where should we start it? We continue to believe that the adjustment of the price of cotton in the world cotton market resulted in a relatively small tight space. If, AWP / cotton price difference is too narrow a view, then investors will join the camp, the buyer, if the AWP / cotton futures price difference of more than 10 cents, selling will be heavy. Therefore, we need to ask ourselves the coming weeks and months, A-index / AWP will be how to develop. We have already mentioned that in the near future, we have seen some of the support measures, the seller do not want to sell short-covering support for the world market prices relatively stable. However, a large number of cotton in the world market is still looking for her, sooner or later, the index of A to form a new pressure, or at least stop the A index rising further. We therefore believe that the market will in the foreseeable future oscillation down, although we must be focused U.S. dollars, because if the U.S. dollar weakness, it will be like the tide to rise all the vessels.