With the start of a new month, there is renewed optimism about the cotton market’s trend. Last week, cotton suffered a massive decline, as end-of-the-month selling emerged based on speculative profit-taking and interest rate concerns. However this morning, as other markets are returning to their bullish trends, the cotton market is likewise staging a comeback.
CFTC reported, via its Friday Commitments of Traders Report, that certain managed money funds were net buyers of 3,886 contracts of cotton for the week ending February 23. Their buying increased their net long to 72,454 contracts. This data was compiled prior to last week’s sharp declined, so it may be assumed overall speculative net long position may actually be lower than these reported amounts.
Spot March cotton saw five deliveries this morning. They were issued by Term Commodities and stopped by Wells Fargo and Macquarie Futures. Overall, deliveries have been considered light. The notice period continues until March 9.
For Monday, support for May cotton is 89.20 cents and 87.30 cents, with resistance at 93.00 cents and 95.60 cents. The estimated morning volume is 14,377 contracts.