Cotton futures were initially called to open around 20-30 higher, with a persistence of fund buying keeping things firm early on.
As it turns out the March actually opened around 15 lower as commercial selling kept things in check early on.
Unlike the previous sessions, there was not any follow through weakness early on, and with that the locals anticipated (or shared) where the stop levels for the short funds are sitting.
The most notable of these lay above 55.00 cents which also coincides with the greatest amount of preliminary commercial selling.
Indeed the commercial selling was more pro-active as prices approached the 54.75 and then 55.00 mark. There was a good supply of fund buying throughout the session, not to mention a lot of support in the options pit.
One spec outfit was a massive buyer of 2000 Dec 75 calls for 80 points. Another trade outfit was a buyer of 1250 Dec 67 calls and then a buyer of 1500 Dec 54/60 spreads delta neutral.
Later in the session prices managed to push through the 55.00 level which was greeted by a wealth of buy stops.
Much of these were absorbed by further commercial selling ( especially co-operative selling ).
In the end prices settled near the highs, with spreads narrowing in considerably. Estimated volume today was the strongest of the week at 21,542 lots.
This morning's US export sales and shipments were a little higher than expected, with export sales of 202,300 combined Pima and Upland running bales.
marketing@alchempro.com
