Buy stops hit as spec and fund buying lifted the market to its highest levels in 2-1/2 weeks. There was an unchanged call to slightly higher as the market opened up and never looked back.
Trading on an average volume of around 10,000 contracts, the market stayed firm with light scale up trade selling as the only pressure during the day.
Technically the market looks like it wants to go higher in the short term, but we will continue to see heavier trade scale up selling in order to redeem cotton for nearby shipments.
Cert stocks remain a key factor for the nearby Dec futures contract expiring in the next four weeks. With over 50,000 b/c awaiting review, we will easily see over 800,000 b/c of cert stock which should force the Dec/March spread to go wider.
At the moment it is staying around the 300 pt. level, but many think it will go much wider before expiration if there is not a taker.
Spec position report comes out tomorrow and would expect to see the 13.4 percent short position come in from last week as the specs seem to have been buyers recently.
Crop progress report came out this afternoon and showed very little change from last week. We continue to see very little business at these higher levels so anticipate the market will eventually go lower after making this test at the highs.
Closing above 50.00 c/lb in Dec was a key level and should open the upside for further gains. Grains and equities had another good day as the energy and metal pits continue to struggle.
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