A fairly quiet trading session today on the month-end of July with an estimated 13,966 contracts traded in the futures and 9,494 contracts traded in options combined. Market was trading in the lower price range for the majority of today's session and much of the buying occurred in the last hour of the session.
December contract closed at 35 points higher near today's high. China Zhengzhou Cotton Futures has seen weaker market, with the September average settlement price down 43 RMB/ton from the previous week. 121,500 metric tons have been transacted since the state reserve auction began on July 16.
Average auction transaction price is expected to decline gradually with foreign cotton competes more actively. This morning's spec hedge report was of little change from the previous week. With a decrease in the open interest over the week, both long and short positions were reduced.
For the week to July 31 spec longs were reduced by 5,794 contracts, while the shorts were decreased by 3,776 contracts. Actual net long contracts are now 65,450 and net position is 31.0% long.
Technically the market had a strong late session today and closed at the high of the recent short term sideway trading range. Z7 again closed above the 9-day moving average and is going forward more friendly. There are some weather concerns growing in South Texas and possibly China has some flooding issues as well.
Tomorrow is the first day of a new calendar month, and it'll be interesting to see how investment funds examine their positions and re-allocate their investments based on their past performance.
marketing@alchempro.com
