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This week’s sharp rally stalled overnight with cotton prices retreating slightly despite a minor setback in the dollar. Open interest continued to fall at the start of this week’s rally, indicating that it may have begun as a short covering affair. However, open interest bounced later in the week suggesting that specs may again be interested in getting long in markets such as cotton that have bullish fundamentals and shrinking stocks. Fresh fundamental data are being delayed this week by the fierce winter storms in the Eastern US. Trade Balance numbers may be out today after being delayed from their scheduled release yesterday. Export sales, normally due out today, are expected to be out tomorrow. Retail Sales are also expected to be delayed from today until Friday. Traders continue to look for the Export Sales report to show strong demand for US cotton. Recent weekly sales totals have far exceeded the average pace needed to meet the USDA’s export projection, but that will change somewhat since the USDA raised its export projection by 1 million bales on this week’s supply/demand report. Stocks registered for delivery against the ICE No. 2 cotton contract rose slightly yesterday to 527,956 running bales versus the previous total of 527,378 running bales.
TODAY’S GUIDANCE: Some traders are looking for the cotton market to drift sideways after this week’s advance, but we are not so sure. There is a great deal of capital still sloshing around in the world, looking for solid investments, and this week’s price action in a variety of markets may be a wake-up call to investors that prices are not going to go down forever. First light support in May cotton is at 72.29 with somewhat better support near 71.50 to 71.70. The next minor resistance is still at 74.26 with a more significant cluster of resistance near 75.50.
Cotton Market Commentary – 2010.02.11
by Terry Roggensack on February 11, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
This week’s sharp rally stalled overnight with cotton prices retreating slightly despite a minor setback in the dollar. Open interest continued to fall at the start of this week’s rally, indicating that it may have begun as a short covering affair. However, open interest bounced later in the week suggesting that specs may again be interested in getting long in markets such as cotton that have bullish fundamentals and shrinking stocks. Fresh fundamental data are being delayed this week by the fierce winter storms in the Eastern US. Trade Balance numbers may be out today after being delayed from their scheduled release yesterday. Export sales, normally due out today, are expected to be out tomorrow. Retail Sales are also expected to be delayed from today until Friday. Traders continue to look for the Export Sales report to show strong demand for US cotton. Recent weekly sales totals have far exceeded the average pace needed to meet the USDA’s export projection, but that will change somewhat since the USDA raised its export projection by 1 million bales on this week’s supply/demand report. Stocks registered for delivery against the ICE No. 2 cotton contract rose slightly yesterday to 527,956 running bales versus the previous total of 527,378 running bales.
TODAY’S GUIDANCE: Some traders are looking for the cotton market to drift sideways after this week’s advance, but we are not so sure. There is a great deal of capital still sloshing around in the world, looking for solid investments, and this week’s price action in a variety of markets may be a wake-up call to investors that prices are not going to go down forever. First light support in May cotton is at 72.29 with somewhat better support near 71.50 to 71.70. The next minor resistance is still at 74.26 with a more significant cluster of resistance near 75.50.
Tags: Cotton, Softs
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