Cotton bounced back after a disappointing performance following the reports on Tuesday. However, the H'08 had trouble getting through 65.50 on the rally and ran into considerable scale up trade selling.
The new crop hedging pressure should keep the market from running away, but it looks like the specs are happy to return to the market and technically its looking much better. However, volume remains below average with only 15,000 in futures and 18,000 in options as the market continues to look like it may be range bound through the end of the year.
Export sales report tomorrow is expected to be close to the 4 week average with 250k in sales and 250k in shipments. The stock market also bounced back over 1%, but eventually went lower almost 1%.
The grains however, put in a strong day as most of the commodities rallied as the dollar fell lower. The Fed also guaranteed assistance with banks to ease the financial crisis, but it looks like there is still enough uncertainty which will keep the market in check over the short term.
Technically markets made a nice bounce that uncovered some buy stops and closed firmly above the 9-day moving average. RSI is back close to 50% and the specs look like they are adding back to their 16% long position. The demand has been steady but not overwhelming as the market looks like it cannot find enough ammunition to retest the contract highs any time soon.
Market may trade sideways in a 63/66 cent range as holidays season approaches.
marketing@alchempro.com
