Even better volume was seen Wednesday with over 33,000 contracts traded in NY cotton futures and 12,000 contracts traded in options. The spreads again made up a good chunk of today's volume. The outside markets were improved today with the equity market closed with a modest gain and crude oil closed above the $50 per barrel mark.
Cotton traded in an over 200 point range and settled the session at the top of today's trading range. Ahead of the options expiration tomorrow, May contract closed at 48.72, a new two month high.
The RSI is currently 68 indicating cotton is approaching overbought area. Liverpool Cotlook report indicated that the cotton group as part of the Chinese commodity purchasing delegation has withdrawn from the upcoming trip proposed at the end of this month.
This development is due to the likely denial of additional cotton import quota by the NDRC. The news of the purchasing delegation has been considered a bullish factor to the commodity prices. Though further confirmation is yet to come, the news of the cancellation has not played a big role in the performance of cotton today.
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