Lowers the trading band in the futures market, but it also prevents US cotton from leaving the loan. Mills will therefore continue to cover most of their needs elsewhere, by buying Indian, African and CIS descriptions, and over time this will firm up the basis of these origins and turn the AWP back up.
The widening AWP/Futures spread coincided with a near-term top on the chart, after March extended itself too far since breaking through resistance about three weeks ago.
It is common for markets to retest important support and resistance levels before resuming what promises to be a new trend. March will therefore have to proove itself and hold the 54.00-54.50 support area in order to keep the uptrend alive.
A collapse below 54.00 would likely mean the end of this breakout attempt and wash out many of the newly established spec longs.
marketing@alchempro.com
