There was a distinct lack of fundamental news surrounding Cotton this morning, so with this in mind the electronic session opened fairly quietly. In addition there were no shocks in the energy market this morning, which had posted > $2 losses across the board yesterday, hence there was not as much weight on the commodity complex in general.
There was a noticeable tightening of the March / May spread though, even in the electronic session where it moved quickly into the 30-40 range. The open outcry session saw immediate strength in March and weakness in May forward.
As it turns out some of the European merchants were in fact selling export last night, which strengthened up the March, as did the bull spreading which dominated the March / May switch as it moved into the 10 – 15 area for much of the session.
There was a lot of market liquidity but with March 30 higher and May 20 lower for much of the session it was hard to pinpoint the overall direction. Options activity was mixed, with one of the largest merchants buying 500 more May 53 puts for 185, though another was a seller of 500 May 55 puts for 300 as well as 700 May 54 puts for 240-250. Another group was a buyer of 500 Dec 60 calls 175-185 over selling the May 55 calls.
Another group was a buyer of 1000 May 60 calls, another still a buyer of 1000 Dec 62 calls. Hence there was little fluidity. Prices finished on a firm note with the March up 56 to 52.80 and the May up 3, July up 11. Volume today was massive once again reflecting the heavy spreading at a grand total of 58,095 combined lots.
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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.")
