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A general idea that the crisis in Japan has reached a peak and that its impact on the world economy will not be as bad as feared helped to support commodity markets overnight, and cotton was no exception. China futures were down 0.6% overnight, but traders apparently saw the recent break as too far, too fast, as US market saw a bounce overnight. May cotton closed down the 7 cent limit for the second session in a row yesterday, although it was able to trade above that level for several hours during the day. Cotton was among the many commodity markets that came under broad-based pressure from the Japanese nuclear problems after last week’s earthquake. Extensive weakness in global equity markets and the general market consensus that China will continue their tightening measures added to the recent negative tone. With yesterday’s decline, cotton prices reached their lowest levels since February 28th. The May contract had fallen as much as 14% in just 8 trading sessions before it recovering overnight and trading sharply higher on the session. China’s planted area for the coming season is expected to increase by 5.4% according to the ministry of Agriculture. Ideas that the cost of the Japanese clean-up efforts could slow the global economy helped pressure the market in recent days. ICE certified deliverable exchange stocks totaled 208,282 bales, up from 204,512 bales the previous session.
TODAY’S GUIDANCE: The market could see a strong recovery off of the recent 8-session decline from the highs but it still looks as though a significant top could be in place.
TODAY’S MARKET IDEAS: May cotton resistance comes in at 200.64 and 204.28 with 184.23 as next support level. December cotton resistance comes in at 124.38 with 115.55 and 109.30 as downside targets.
Cotton: Could See Strong Recovery but Significant Tops Looks In Place
by Terry Roggensack on March 16, 2011
Below is a sample of The Hightower Report’s 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!
A general idea that the crisis in Japan has reached a peak and that its impact on the world economy will not be as bad as feared helped to support commodity markets overnight, and cotton was no exception. China futures were down 0.6% overnight, but traders apparently saw the recent break as too far, too fast, as US market saw a bounce overnight. May cotton closed down the 7 cent limit for the second session in a row yesterday, although it was able to trade above that level for several hours during the day. Cotton was among the many commodity markets that came under broad-based pressure from the Japanese nuclear problems after last week’s earthquake. Extensive weakness in global equity markets and the general market consensus that China will continue their tightening measures added to the recent negative tone. With yesterday’s decline, cotton prices reached their lowest levels since February 28th. The May contract had fallen as much as 14% in just 8 trading sessions before it recovering overnight and trading sharply higher on the session. China’s planted area for the coming season is expected to increase by 5.4% according to the ministry of Agriculture. Ideas that the cost of the Japanese clean-up efforts could slow the global economy helped pressure the market in recent days. ICE certified deliverable exchange stocks totaled 208,282 bales, up from 204,512 bales the previous session.
TODAY’S GUIDANCE: The market could see a strong recovery off of the recent 8-session decline from the highs but it still looks as though a significant top could be in place.
TODAY’S MARKET IDEAS: May cotton resistance comes in at 200.64 and 204.28 with 184.23 as next support level. December cotton resistance comes in at 124.38 with 115.55 and 109.30 as downside targets.
Tags: Cotton, Softs
About Terry Roggensack