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!
The cotton market is finding support from fears of depleting deliverable stocks, and this is helping to drive shorts out of the market. The market saw a low-volume rally yesterday, and this move against the general bearish tone for commodities has caught some “commodity bears” off guard and could support a continued bounce over the near term. December followed July reluctantly yesterday, as Monday afternoon’s Crop Progress report had indicated that the plantings pace picked up somewhat last week. Dry conditions are expected to persist in west Texas for the next several days, but east Texas could get a significant shower, and some traders are concerned that rains could shift to the west and allow for some improvement in the crop. However, the chances of this happening appear low for now, and if Lubbock stays dry into the weekend, drought fears could gain traction. Georgia’s conditions are also too dry, while the delta is too wet. July cotton led the market higher yesterday with more talk of tightening exchange stocks, and this helped drive shorts out of the market. A continued decline in open interest and volatility for old crop has sparked bigger price swings on less volume. China cotton futures closed 0.2% higher overnight. ICE certified deliverable stocks increased to 179,090 bales, up from 166,354 bales the previous session but still down from 284,666 bales earlier last week. Positive textile export data from China last week have helped support a better demand tone for the market.
TODAY’S GUIDANCE: The market seems to be in a position to see at least a temporary recovery bounce, as commercial demand for certified stocks could spark short-covering from speculators. July cotton has support at 152.05 and 149.48 with 163.74 as first key resistance.
Cotton: Seems To In a Position For Recovery Bounce
by Terry Roggensack on May 18, 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!
The cotton market is finding support from fears of depleting deliverable stocks, and this is helping to drive shorts out of the market. The market saw a low-volume rally yesterday, and this move against the general bearish tone for commodities has caught some “commodity bears” off guard and could support a continued bounce over the near term. December followed July reluctantly yesterday, as Monday afternoon’s Crop Progress report had indicated that the plantings pace picked up somewhat last week. Dry conditions are expected to persist in west Texas for the next several days, but east Texas could get a significant shower, and some traders are concerned that rains could shift to the west and allow for some improvement in the crop. However, the chances of this happening appear low for now, and if Lubbock stays dry into the weekend, drought fears could gain traction. Georgia’s conditions are also too dry, while the delta is too wet. July cotton led the market higher yesterday with more talk of tightening exchange stocks, and this helped drive shorts out of the market. A continued decline in open interest and volatility for old crop has sparked bigger price swings on less volume. China cotton futures closed 0.2% higher overnight. ICE certified deliverable stocks increased to 179,090 bales, up from 166,354 bales the previous session but still down from 284,666 bales earlier last week. Positive textile export data from China last week have helped support a better demand tone for the market.
TODAY’S GUIDANCE: The market seems to be in a position to see at least a temporary recovery bounce, as commercial demand for certified stocks could spark short-covering from speculators. July cotton has support at 152.05 and 149.48 with 163.74 as first key resistance.
Tags: Cotton, Softs
About Terry Roggensack