Cotton is overcoming a Sunday night spill to trade slightly higher Monday morning. The market is attempting to correct its heavily oversold condition, but is also receiving positive encouragement from a very strong Dow Jones.
To that point, Friday’s commitment-of-traders report from the CFTC indicates all trading categories were net sellers last week. The managed money funds sold some 2,000+ contracts, keeping that group heavily net short with 17,250 contracts.
In addition, most traditionally-held chart indicators have been flashing “oversold” for several weeks. Given the recovery in crude oil, and Monday’s upside Dow, cotton speculators are less enthused about being sellers of the market.
This week will be abbreviated as the market is closed for Good Friday. Interestingly, the market posted its annual high for 2019 last Easter, which somewhat opens the door for perhaps a reciprocal low this Easter.
For Monday, support for May cotton is 49.70 cents and 48.76 cents, with resistance at 52.00 cents and 52.75 cents. Overnight estimated volume is 20,710 contracts.