A fairly quiet trading session on NY Thursday. Market was initially called to open around 10 lower, but held up steadily during the first hour or so and established today's high at 6660 basis Z7. Market then turned direction to trade lower with the afternoon session quickly pushed down by bearish options activities.
Market finally settled near today's low at around 200 points lower on all front cover months. Among the noticeable options today, one of the larger merchants was a buyer of 2,000 of the December 64 puts paying 315 points.
Another group were a seller of 1,400 December 70/75 call spreads for 91 points. Estimated volume is 27,335 contracts in futures and 24,106 contracts in options.
This morning's US export report was unimpressive but expected. New sales were 143,200 running bales upland and pima combined, and shipments were ok with 437,700 running bales combined.
China was unsurprisingly the largest destination with 139,600 bales leaving for the week. China has now committed to buy 4.205 million bales, and has taken delivery of 3.338 million bales for this marketing year.
Technically, December chart looks bearish. With a week low close, the bears are sensing weakness for the first time in this long 8-week rally and will be more aggressive to take advantage of selling opportunities. This will pose follow through selling pressure on tomorrow's session.
The 9 day moving average starts to trend lower, and settles at 6671 today. The RSI has corrected significantly again from 66 to 55 which was a much needed pullback. The range short term seems to have found a top and bottom and may lead to some sideways trading on light volume.
marketing@alchempro.com
