Somewhat surprisingly, cotton traders ignored the export sales report last week– which was the largest of the season and gave a strong indication of the demand that rests below the market. Sales on this report were consummated on the three dips to 63 cents from the week before. Shipments, while still shy if what is needed, were still the best since August 30th.
Sad to say but The end of commodity trading, as we have always known it comes to an end of February 2008. Open outcry trading in the New York cotton pit will be no more beginning Monday March 3rd. –from then on, cotton futures contracts will only be traded only electronically. This change, at least for now, does not effect option trading.
Memphis Analytical firm Informa Economics, is now estimating that with grain prices where they are, cotton plantings next year could be as low as 9.185 million acres – 1.66 million acres less than the 10.847 million planted this year and over 6 million less than the 15.27 million acres planted in 2006. The first planting intentions report belongs to the National Cotton Council at their annual convention the first week in February.
Multiple attempts at closing below 6307, which was 50% correction from contract low to contract high, failed week before last and when followed by close above 6440, built the technical base for last weeks good performance. As emphasised in last weeks market letter, that bottoming action projected a near term target of 6600-6650.
This target was confirmed Friday with a close above 6550 which had previously been the high for the week. This was the second consecutive week that a late rally has allowed new weekly highs at the close Friday. Now, it is up to the bull to keep the uptrend intact by providing higher lows as well as higher highs.
marketing@alchempro.com
