In other markets, the CRB lost about 1,500 points last week. Wheat continues to be the star performer in the grain sector as prices gained another 40 to 53 cents higher, depending upon the exchange. Wheat had a wild 43 cent range Friday. Soybeans lost 18-20 cents for the week while corn lost a little less than 2 cents. Crude oil lost nearly $10 last week. Gold broke back some $42 while silver gave up about 80 cents.
Stocks on the other hand, gained three percent in the Dow, 2.81 percent in the S&P 500 and 2.48 percent in the NASDAQ. It was the best weekly point gain in more than four years. This weeks reports include jobs and retail sales along with readings on the manufacturing and service industry. The Fed meets on December 11th.
Some anticipate March cotton taking the place of December, I am not in that camp; at least not yet. So much of the drop to the current level was due to liquidation phase of speculative positions in cotton. I should think current demand at this level should begin to provide stability and provide the base support for the speculative bulls.
However, this requires a much improved technical situation that can only be proven by performance and in particular, a close above last weeks highs. Longer term, the possibility of recession is the biggest potential fly in the ointment, by far. Goldman Sachs now estimates the possibility of a recess at 40-45 percent.
Friday's low matched up well with a 50 percent correction of the entire moved from contract lows to contract highs - a very logical place to dig in and provide a base for a bounce. If Friday's 6300 lows for March cotton do not hold, I would expect filling of the gap left the end of August at 6225 would provide an end of the current washout.
marketing@alchempro.com
