Cotton futures started out being called nearly 50 higher this morning, as reaction to the unexpectedly large US export sales report along with some spec fund interest fueled the opening.
As it stands the March opened just 15-20 higher, with some immediate commercial selling. The opening range proved to be the low for the session in the end, as funds became immediate buyers on the re-opening.
Co-op and farmer selling was stout around the 53.00 level in March which was the resistance point last week. Local buying—knowingly seeking stops above this level– combined with fund buying and trade options buying and in-particularly the said stops caused a catapult in price above the 53.00 and up to 53.50 resistance.
Commercial selling against US equities was noted all the way up, especially the co-ops who maintained heavy sell scales. For the remainder of the session the action took place between 53.40 and 53.70, with the funds continuing to be heavy short covering buyers throughout.
Funds were reputedly buyers of 1,000 Marches on the close for month end position squaring. Estimated volume today was strong at 26,000 lots.
The US census bureau annualized October US domestic consumption at just 5.10 million bales, which is as expected. This morning's US export sales and shipments was a friendly surprise, with 510,400 combined upland and Pima new sales recorded. Mexico was the largest buyer, apparently buying co-op to the tune of 263,100 bales.
marketing@alchempro.com
