Cotton has some catching up to do if it still wants to still play follow the leader
Cotton prices moved lower on Thursday and reached a new low for the week as March dropped as low as 67.23 early in the day. The drop took prices to the bottom of the recent trading range and while a recovery was mounted, values didn’t seem to have the ability to respond to the leadership [provided by the stock market and grains. The stock market actually continued to firm well after cotton had closed, so there is the chance that prices will try and catch up in the morning. If stocks continue to perform well then maybe things aren’t as bad as they have so many believing.
Today’s export report (296,700 running bales for the recent week) was below expectations and that caused prices to trade down to their lows. There had actually been talk of big numbers stemming from the sharp price drop when values traded synthetically down to 6630 before rebounding the next day.
Longs are still in control, but now holding weakened positions and a move through 69.50 is needed to keep the ball rolling in their favor, a break below 66.50 and watch out below! Otherwise look for a range between 68.40 and 67.50.
For whatever reason, each day has alternated between up and down since the sharp limit down day last week. Does this also suggest an up day for tomorrow?
Chinese New Year will quiet things for the next week, although the Goldman roll typically starts on the 5th business day. That should widen the H/K spread and will likely be celebrated by floor traders as it is scheduled to be the last one before ICE shuts down the futures pits. Options will continue to trade.
I remain a long term bull, but have no real position on. I’m waiting to see if a meltdown comes. I’m still bearish on March and expect that May will visit March’s levels before it leaves the board. Who really is going to plant cotton?
Support: 6735-6720, 6677-6650, then watch out below
Resistance: 6850, 6910-6940, 7000
Si quiere más información, por favor contáctenos,
El equipo de Brokers de Futuros USA
Fuente: MF Global
©2007 Jurgens Bauer & Associates all rights reserved.
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