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ECOM daily cotton markets recap - Feb 23, 2007
24 Feb '07
2 min read
Follow on buying from yesterday's strong showing as well as the strong cert taker last night saw some early strength in the Cotton market this morning, firstly on the E screen and then in the open outcry pit.
Prices started out around 10-20 higher across the board and remained firm throughout the session. There appears to be quite a lot of spec and hedge fund short covering of late and this was indeed the case today.
Looking at the virtual spot May contract below, it is easy to see why funds are a little nervous being short the market right now. March has almost come to a standstill in terms of active trading, as it appears that there are strong issuers and stoppers alike.
It is an interesting move with taking deliveries of the March at 200 points premium to the May, however we are of the belief that in any case there is a long term play being constructed here.
Estimated volume was decent at This morning's export sales and shipments fairly exceeded the trade expectations. New sales of 400,800 upland and Pima combined included a massive 133,000 sales to China as well as 62,100 bales to Turkey.
Export shipments of 232,300 bales were decent and slightly above expectations but still a long way from what I s needed to get anywhere near the USDA estimates.
Delivery notices today were quiet today, with UBS issuing 80 lots and Term ( Allenberg ) again the 100% stopper.
The May contract has increased it's volatility of late, with today being something of a breakaway day. At present the 51.50 low is holding together well, and today's entire session traded above the 9 day exponential moving average is certainly a bullish short term indication.
The 50 day moving is still in decline at 54.90, which would be heavy resistance, but there is enough to present a short term bounce in the meanwhile. Momentum wise the RSI advanced to 49.64 having bounced off the 30 area.
Click here to view graphical presentation:
Prices started out around 10-20 higher across the board and remained firm throughout the session. There appears to be quite a lot of spec and hedge fund short covering of late and this was indeed the case today.
Looking at the virtual spot May contract below, it is easy to see why funds are a little nervous being short the market right now. March has almost come to a standstill in terms of active trading, as it appears that there are strong issuers and stoppers alike.
It is an interesting move with taking deliveries of the March at 200 points premium to the May, however we are of the belief that in any case there is a long term play being constructed here.
Estimated volume was decent at This morning's export sales and shipments fairly exceeded the trade expectations. New sales of 400,800 upland and Pima combined included a massive 133,000 sales to China as well as 62,100 bales to Turkey.
Export shipments of 232,300 bales were decent and slightly above expectations but still a long way from what I s needed to get anywhere near the USDA estimates.
Delivery notices today were quiet today, with UBS issuing 80 lots and Term ( Allenberg ) again the 100% stopper.
The May contract has increased it's volatility of late, with today being something of a breakaway day. At present the 51.50 low is holding together well, and today's entire session traded above the 9 day exponential moving average is certainly a bullish short term indication.
The 50 day moving is still in decline at 54.90, which would be heavy resistance, but there is enough to present a short term bounce in the meanwhile. Momentum wise the RSI advanced to 49.64 having bounced off the 30 area.
Click here to view graphical presentation:
ECOM USA Inc, USA
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