Cotton Futures began the day being again offered, initially opening 25 lower with a complete lack of bids early on. The specs were residual sellers from late yesterday, however they did catch a trade bid this morning on the re-opening, and within the first half hour prices had consolidated to unchanged levels basis December.
There was some early profit taking on bear spreads from yesterday, and this softened up the Dec / march spread to around 390 from starting out around 405.
Most of the volume and activity today was again concentrated in the spreads, with more and more spec bear spreading taking place through the second half of the session, despite the fact that flat prices were firming across the board.
Light spec short covering and some bullish trade options were noted as strength, but again, there was little flat price action and a lot of spread action.
Increased interest in the Dec 07 contract was again noted today, mostly from correlation type spec buying with the firmness in grain prices of late likely dictating more and more global acres going into grains instead of Cotton for the new crop.
Prices settled 40—50 higher across the board amidst an estimated volume of 23,000 lots.
This morning's US export sales and shipments were as expected, fairly unimpressive. New sales of 125,100 net were split mainly between Turkey, China and Mexico.
These were also the main destination for shipments, which totaled 118,800 running bales.
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