The cotton market has traded both higher and lower than yesterday’s settlements, but with a tad more emphasis on lower. Given that Thursday is the Fourth of July, volume ought to be tempered a bit today, and most likely Friday. However, with Thursday’s weekly sales and exports delayed until Friday morning, that session should prove more volatile.
As the market enters the month of July, trade is becoming aware of uncertainties of global production, as well as a huge net-short position held by speculators. Traders are also growing more optimistic about a trade deal with China, and in fact hope to see increased Chinese purchases even before a deal is signed. Thus, the month of July could prove to be one with a lot of fireworks, and not just on the Fourth.
July cotton is rapidly winding down its trading life. There were zero deliveries today, but 233 notices have been issued since delivery commenced. It will expire on Tuesday, July 9th.
For today, support for December cotton will be 65.70 cents and 64.70 cents, with resistance at 68.35 cents and 68.60 cents. Estimated overnight volume is 3,716 contracts.