Futures prices were earlier called to open around 20 to 30 lower this morning amidst fairly anemic circumstances, with little in the way of overnight business noted and just a scattering of fund selling on the opening.
December ticked open down some 40 points initially at 52.10, setting on the opening what then proved to be the low for the session.
Prices caught a bid tone after the opening though with trade support ahead of 52.00 and they duly rose up to 52.75 on the reopening and thereafter in the first 15 minutes, however it was for the most part just some local short covering after the early lows, along with light spec buying.
With the Cert stock rising—now as high as 724,709 bales, the Dec/ March spread again moved wider today, which is now heading back towards the wide point of last week near 380.
With the exception of spreads though trading was fairly dull, and this can be further explained by an estimated volume of just 7,000 lots.
Prices ended the session back towards their early lows for losses of 12 in March and 29 in Dec.
Tomorrow's export report should be a similar story to recent weeks, with sales in the vicinity of 200,000 bales (we expect China to return as the prominent buyer in this report) whilst shipments will again be mostly non existent.
Technically the December continues to stabilize between a narrow, 51.50 to 53.00 range.
Today's session built on yesterdays expansion, though once again price has closed beneath the 9 day exponential average, and it continues to fail to make an impression at the upper end of the current range.
Momentum remains neutral, whilst resistance can be visibly seen around 53.00 cents.
To the downside, we would expect to see a large amount of new shorts enter a break below 51.50 and certainly below 51.20, the old contract low.
marketing@alchempro.com
