The market is slightly higher Monday as the trade continues to see buying from Friday’s strong up day. After fairly decent sales and exports data Thursday, the market then saw the news China was issuing new import quotas for certain size domestic mills.
The market responded to the announcement with a strong up day on Friday. The fact China is now willing to allow new imports reflects the fact the strategic reserve is down from recent double-digit levels, and that demand is growing.
Monday afternoon, USDA will release its latest planting progress numbers. The 2019 crop is likely off to a slow start. Over the weekend, a strong and destructive storm raced across the nation, birthing numerous tornadoes and causing heavy rains. Thus, some ordinary fieldwork may be delayed.
Still some analysts suggest with normal weather across the Northern Hemisphere, production may be higher this season. USDA personnel in foreign capitals are reporting the possibility of increased acre percentages in competing nations.
The commitment of traders report indicated managed money traders increased their net-long position. Supposedly last week, they bought over 6,000 contracts, which places them net-long some 14,500 contracts. Non-commercial traders also added to their net long position.
Interestingly, current open interest of 216,476 has fallen slightly below the Valentines week low of 216,593 contracts. We have yet to learn what effect May options expiry had on open interest.
For Monday, support for May cotton stands at 76.88 cents and 76.32 cents, with resistance at 78.65 cents and 79.32 cents. Overnight estimated volume is 10,842 contracts.