The cotton market is trading mixed Wednesday morning with old crop contracts slightly higher, and new crop December slightly lower. Yesterday’s strong upside rally was credited to a potential trade deal with China, a worsening of the Indian crop, and the tug of cotton’s spring seasonal.
The technical tend of the market appears to be changing as certain technical indicators are now carrying a bullish slant. The definition of a bear market is a path of lower lows and lower highs. Thus whenever that pattern is broken, traders often associate that action as the beginning of a change in trend.
For May cotton, a close over 76.14 cents would be overlapping a previous lower high.
Thursday, USDA will issue its weekly sales and exports data. With exports being left unchanged on last week’s crop report, it will be interesting to see if some Chinese business in the old crop is done.
For today, support for May cotton is 74.70 cents and 73.55 cents, with resistance at 76.15 cents and 77.50 cents. Overnight estimated volume is 11,200 contracts.