The market has been trading on light volume all week but its starting to look better technically. Similar to yesterday, the market closed strong on the close which created a technical mini-breakout. Important reports coming out next week may give more fundamental support to this mini rally which has begun.
Market should see good trade scale up selling above 65 cents. The volume today was within the weekly average range with 15,000 futures and 10,000 options.
The harvest is nearing completion as Lubbock is 85% done and working hard this week to finish before some wet wintery weather is coming in the forecast next week. Please see a more thorough update of the West Texas harvest conditions on page 2 in attached PDF.
There was some friendly fundamental information this morning with the announcement of 15,000 decerts and the cert stock falling to 580k bales. There was also some friendly option activity near the end of the day with several hundred H'08 64 puts being sold by funds. This triggered some of the rally which may continue to carry on Monday prior to the reports on Tuesday.
Market closed above the 9-day moving average and the market continues to find good scale down buying near 63.00. RSI is about 43% and the specs are only 18% long. The demand has been steady but not overwhelming. However, we were looking oversold and due for a bounce and have to see if this can find some follow through support next week.
The grains were also up very strong today and showed that they may have some more room to the upside which will drag cotton higher.
marketing@alchempro.com
