Cotton futures trade higher

13 May '08

2 min read

Cotton futures traded higher today on light volume in spite of lower prices in outside commodity markets. The market overnight was very quiet as well and after the grains opened this morning in Chicago, we had a small pull back in prices as we set the low near 70 cents after grains opened weak.

After bouncing off the lows, cotton pushed higher most of the day as we closed near the highs and might be setting up for a run at the 72.43 high set back on May 1st.

Volume was fairly light today with only 16,000 futures and 7,000 options as we are still looking for some more commitment to break us out of the current sideways trading range.

There continues to be good demand at these levels as we struggle to go lower, but the upside is also showing to be very limited. The soybean chart is starting to show some technical strength as well as the strong chart in cotton, but we just cant seem to get any good scale down support as open interest continues to remain basically unchanged with only 251,000 contracts. Cert stocks are continuing to grow and the spreads are remaining at the highs so we continue to see depressed demand in the front month which may continue going forward.

NYF cotton prices are holding up well considering the bearish fundamentals as well as the beneficial rains last week in West Texas. Technically, we broke the strong support line at 70 cents in N'08 last week, but we have closed above that level five days in a row.

The cotton market feels like we are trying to put in a short term low near 69 cents but we have had seven continuous inside trading days based on the range set May 1st. We first need to break that high set at 72.43 and we can pursue further upside targets heading toward significant resistance near 75 cents.

Click here to read more details:

ECOMUSA Inc

More ECOMUSA Inc News... More Textiles News - United States Of America...