Friday session was choppy and active with an estimated 5,165 contracts traded on the floor and 32,298 contracts traded electronically. ICE opened around 40 points higher in line with overnight strong prices in grains and crude oil. Oil price topped above USD92 per barrel Thursday night.
There's uneasiness in the market that oil supply is not sufficient to meet the increasing demand in the upcoming winter season, and the spec activities have pushed the price to the all time record high. The low of the day at 64 cents was locked around mid session when harvest pressure set in, according to analysts.
Also some recommendations came in which encouraged speculators to buy March 75 cent calls for a couple thousand times. March 75 cent call is indeed a spec favorite with currently 8,700 contracts open interest. This spec buying helped market to rally from the low and settled at 46 to 47 points higher on December and March contracts.
Open interest was increased by nearly 1,500 contracts yesterday. As funds continue to increase their long positions in cotton, which pushed the open interest to one record high after another, trade is well holding the short side of the market.
Harvest is well under way, which puts pressure on the supply side, big news from the demand side, which everyone has been waiting for, has not come in yet. The uncertain production figures from China, India and Pakistan also keep traders wonder how market is going to perform inthe near term.
marketing@alchempro.com
