Stock markets have made a strong correction this week from the lows just under 6500 and this has given good strength to the commodity markets. The technicals are looking much better now and fundamentally we have sold 1.5 million bales in the last 4 weeks.
Shipments have picked up and there is good support near the lows set back in November at 40 cents. At these levels, high grade cotton can land the Far East in the mid to low 50's which is a level that demand is strong especially with less high grades available this year in new crop.
There is no doubt cotton has reached fair market value, but we will see good trade scale up selling in order to redeem cotton.
The AWP is officially under 32 cents so we will have sellers near 44 cents in K'09 scale up. Volume is still light, but after two green days, Friday may see some more follow through especially if the equity markets stay strong. The specs may be unwinding their short positions as buy stops are looked for above the market.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
