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ICE cotton opens at 50 points higher
26 Aug '08
2 min read
Monday session started on a friendly note after Friday reversed Thursday's positive performance as a strong dollar led way to push oil price below $120 per barrel. As fears of tension between Russia and Georgia continue, support to the oil prices is expected to come into play at this level.
Overnight ICE cotton opened at 50 points higher and managed to stay in the positive area. Sharp drop on the market came soon after an intraday high was posted on Z'08 at 70.48. Some sell orders swept the market with close to 1,000 contracts traded within a minute's time and today's low at 67.62 quickly came and quickly went.
The market recovered just as fast enough to trade around today's settlement level for the majority of the session. NY December contract gained 204 points over the course of last week, and the trading volume has averaged at 11,000 contracts daily.
Open interest remained steadily at around 215,000 contracts. As per the traders commitment report, Non commercials further reduced their net long positions in cotton, which is now a mere 7,224 contracts net short in futures and options combined, down another 2,000 contracts from a week before. Commercials have also slightly reduced their net short positions by 6,000 contracts.
Technicals turned friendly last week as MACD started to cross higher in cotton made a nice run to the upside. The quick drop in prices today made the traders realize just how volatile this market could be, but it was not ready to let the prices go down too much lower just yet.
Considering the low open interest in cotton and the lack of demand, cotton feels like we may continue in a sideways trading range up to heavy resistance at 72.00. This will depend on how much the rebound in outside markets can follow through, but the short term upside looks limited and we may see a correction in cotton if we cannot break through 72.00 cents.
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Overnight ICE cotton opened at 50 points higher and managed to stay in the positive area. Sharp drop on the market came soon after an intraday high was posted on Z'08 at 70.48. Some sell orders swept the market with close to 1,000 contracts traded within a minute's time and today's low at 67.62 quickly came and quickly went.
The market recovered just as fast enough to trade around today's settlement level for the majority of the session. NY December contract gained 204 points over the course of last week, and the trading volume has averaged at 11,000 contracts daily.
Open interest remained steadily at around 215,000 contracts. As per the traders commitment report, Non commercials further reduced their net long positions in cotton, which is now a mere 7,224 contracts net short in futures and options combined, down another 2,000 contracts from a week before. Commercials have also slightly reduced their net short positions by 6,000 contracts.
Technicals turned friendly last week as MACD started to cross higher in cotton made a nice run to the upside. The quick drop in prices today made the traders realize just how volatile this market could be, but it was not ready to let the prices go down too much lower just yet.
Considering the low open interest in cotton and the lack of demand, cotton feels like we may continue in a sideways trading range up to heavy resistance at 72.00. This will depend on how much the rebound in outside markets can follow through, but the short term upside looks limited and we may see a correction in cotton if we cannot break through 72.00 cents.
Click here to view more:
ECOM USA Inc
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