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December cotton ticked through its June highs yesterday to trade at the highest level since late September, 2008. The market then sold off into mid morning before ending the day lower. This makes cotton one of a number of commodity markets that have made a significant new high and then closed lower over the past week, and it sets the stage for a modest retracement or pause in the rally in coming days. However, losses should be limited in cotton due to continued stressful weather in the south and southwest. A number of other factors could also easily arise to support the market on a pullback. These include: a lower dollar, a strong export sales number this morning, positive news on today’s Initial Jobless Claims report and Friday’s Unemployment report and the continued slide in stocks registered for delivery against the ICE futures contract. Traders are looking for an export sales total this morning somewhat in excess of the average needed each week to meet the USDA’s export projection for 2010/11. That average currently stands at 182,300 bales. Two private jobs numbers came in better than expected yesterday and that may cause some analysts to make positive adjustments to their forecasts for Friday’s big Unemployment report. The area of super hot air in the US is being pushed south and west today with 100s expected in central and eastern Texas (with the exception of the Gulf Coast), northern Louisiana, the southern two thirds of Arkansas and western Tennessee. The 100 degree patch is expected to mainly pull back into Texas tomorrow. Stocks registered for delivery against the ICE contract fell to a new low for the decade yesterday at 41,478 bales from the previous day’s total of 44,145 bales.
TODAY’S GUIDANCE: There are a number of factors that may support further new highs in coming days despite yesterday’s retreat from a new high for the move. First support in the December contract remains near 78.00 and then at 77.45 to 77.50. First resistance is at the new high of 79.95 with next resistance near 80.75.
Cotton Market Commentary – 2010.08.05
by Terry Roggensack on August 5, 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!
December cotton ticked through its June highs yesterday to trade at the highest level since late September, 2008. The market then sold off into mid morning before ending the day lower. This makes cotton one of a number of commodity markets that have made a significant new high and then closed lower over the past week, and it sets the stage for a modest retracement or pause in the rally in coming days. However, losses should be limited in cotton due to continued stressful weather in the south and southwest. A number of other factors could also easily arise to support the market on a pullback. These include: a lower dollar, a strong export sales number this morning, positive news on today’s Initial Jobless Claims report and Friday’s Unemployment report and the continued slide in stocks registered for delivery against the ICE futures contract. Traders are looking for an export sales total this morning somewhat in excess of the average needed each week to meet the USDA’s export projection for 2010/11. That average currently stands at 182,300 bales. Two private jobs numbers came in better than expected yesterday and that may cause some analysts to make positive adjustments to their forecasts for Friday’s big Unemployment report. The area of super hot air in the US is being pushed south and west today with 100s expected in central and eastern Texas (with the exception of the Gulf Coast), northern Louisiana, the southern two thirds of Arkansas and western Tennessee. The 100 degree patch is expected to mainly pull back into Texas tomorrow. Stocks registered for delivery against the ICE contract fell to a new low for the decade yesterday at 41,478 bales from the previous day’s total of 44,145 bales.
TODAY’S GUIDANCE: There are a number of factors that may support further new highs in coming days despite yesterday’s retreat from a new high for the move. First support in the December contract remains near 78.00 and then at 77.45 to 77.50. First resistance is at the new high of 79.95 with next resistance near 80.75.
Tags: Cotton, Softs
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