The beginning of harvesting
Harvesting has started in several cotton areas of Greece. Of course in many cases the harvested fields refer to early varieties or dry fields. In total less than 5% has been harvested, however during the weekend and as we move on to next week the percentage will increase. Weather conditions are favorable till end next week, when few light rains are predicted.
Ginning mills have just started ginning so we need couple of weeks to be certain of this season’s quality. Regarding quantity, it seems that the estimate of 250k tons is conservative and provided weather remains favorable we may reach the 270k tons of lint. Out of this quantity about 70k tons have been sold forward mostly to international merchants.
Regarding prices, during the week we heard of some small volume business to direct channels between 77.5-78,50 usc/lb FOT for hvi 41. These fix prices were equivalent to 800-850 on Dec 17. Referring to on call offers, following futures correction ginners are targeting at basis between 750-800 on Dec 17 depending on quality and shipment terms.
Provided futures remain close to the 69-70’s and ginning mills experience mass deliveries of seed cotton in short period of time, it is likely that basis will come under pressure. On the contrary, in case futures market drops and seed cotton deliveries follow a normal pace, it is for sure that ginners will resist to any weakening of the basis.
kind regards, Yiannis Papadogiannis