As the market returns from a three-day break, spot March is trading a bit softer. Traders are concerned about continuing weakness in various stock markets over impending higher interest rates. Next week the Federal Reserve will meet to decide its plans for hiking rates as a means of slowing inflation. To that end, the U.S. dollar is recovering Tuesday morning.
CFTC issued its weekly Commitments of Traders report last Friday, and it revealed that certain managed-money funds had reduced their net long position. With a cut-off date of January 11, those particular funds had sold some 3,513 contracts, shrinking their overall net long position to 76,764 contracts. That is still a huge position.
As a heads-up, given that Monday was a federal holiday, all USDA reports will be delayed by one day this week. Weekly export sales will be out on Friday at 8:30 a.m. EST. Last week saw sales of 401,000, suggesting interest remains very stout among importers.
For Tuesday, close-in support for March cotton is 114.80 cents and 114.00 cents, while resistance stands at 120.70 cents and 121.10 cents. The estimated morning volume is 8,587 contracts.