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News Flash
Market undergos huge pressure due to lack of technical support
09 Jun '08
3 min read
Small speculators still had some 23'000 longs and 15'000 shorts in their books, but these are made up of a lot of small, non-reportable positions, which are probably not on the CFTC radar screen.
Therefore, since these large outright spec longs have already cut their positions by more than half in three months, there is not that much left to go, even if every last one of them were to throw in the towel. Spec shorts on the other hand may still increase their positions further as the market weakens, but that has nothing to do with the CFTC probe.
As far as Index Funds go, we saw an increase in both long and short positions last week, although we cannot quite explain why shorts in that category would grow by another 5'000 contracts to currently almost 13'000 contracts, because index funds are typically not allowed to operate from the short side. The promise by the CFTC to make these reports more transparent would certainly go a long way in trying to understand some of these positions.
The trade continued to be a good buyer at these lower levels, adding 12'000 net longs and buying back nearly 7'000 shorts in the week of May 20 to 27, thereby reducing its overall net short position to just about 128'000 contracts. This is only a little more than half of what it was three months ago.
These lower prices are definitely stimulating physical business, as we can see from the latest US export sales report, which came in at a strong 576'100 running bales of Upland and 1'800 bales of Pima. Interestingly, 553'500 of these bales were for June/July shipment, which highlights the urgency with which these 23 markets on the buyers' list need cotton.
Unfortunately, logistics in the US are not able to keep up with this demand, as shipments once again amounted to only 243'400 running bales.
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Therefore, since these large outright spec longs have already cut their positions by more than half in three months, there is not that much left to go, even if every last one of them were to throw in the towel. Spec shorts on the other hand may still increase their positions further as the market weakens, but that has nothing to do with the CFTC probe.
As far as Index Funds go, we saw an increase in both long and short positions last week, although we cannot quite explain why shorts in that category would grow by another 5'000 contracts to currently almost 13'000 contracts, because index funds are typically not allowed to operate from the short side. The promise by the CFTC to make these reports more transparent would certainly go a long way in trying to understand some of these positions.
The trade continued to be a good buyer at these lower levels, adding 12'000 net longs and buying back nearly 7'000 shorts in the week of May 20 to 27, thereby reducing its overall net short position to just about 128'000 contracts. This is only a little more than half of what it was three months ago.
These lower prices are definitely stimulating physical business, as we can see from the latest US export sales report, which came in at a strong 576'100 running bales of Upland and 1'800 bales of Pima. Interestingly, 553'500 of these bales were for June/July shipment, which highlights the urgency with which these 23 markets on the buyers' list need cotton.
Unfortunately, logistics in the US are not able to keep up with this demand, as shipments once again amounted to only 243'400 running bales.
Click here to view more:
Plexus Cotton Limited
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