The cotton market is lower Thursday morning as its overbought condition is encouraging traders to book profits. Spot March posted a new contract high for the third consecutive session yesterday. Its rally has taken it to the highest price level since June of 2011. In fact, the ICE Futures have gained some 10% this year, and the year is only 20 days old!
Weekly sales and exports are delayed until Friday due to the observance of the MLK Holiday Monday. In Friday’s data, traders are needing to see strong sales and shipments to keep this bull advance intact.
Also Friday the CFTC will issue its commitment-of-traders report. This inflation has been key as to the market’s trend as it breaks down the positions held by the speculators and commercials. That report is out at 3:30 p.m. EST.
Traders also continue to watch the U.S. dollar with a wary eye. Next week the Federal Reserve will announce its latest change, if any, regarding monetary policy. It is thought the Fed will pursue a path of hiking interest rates.
For Thursday, close-in support for March cotton is 120.70 cents and 119.40 cents, while resistance stands at 124.80 cents and 125.45 cents. The estimated morning volume is 7,587 contracts.