Following weaker performance from the overall outside markets including agricultural commodities, metals, crude oil and overseas equity, Monday NYF cotton market opened to trade sharply lower.
December contract tested today's low at 64.10 by early afternoon session. However, based on last Thursday and Friday's price movement, there were expectations in the market that cotton might gain slightly later in the session. This scenario was again true for Monday.
Market rallied before settlement and gained around 70 points from the low. Friday session increased the open interest by nearly 4,000 contracts and pushed the balance well above 240,000, a new record high. Estimated volume today was decent with 4,961 contracts traded on the floor and 20,211 contracts traded electronically.
Today's spec hedge report was of no surprise, with an increase of nearly 2% in the net long from the previous week. With consistent increase in the open interest over the week, both longs and shorts have increased their positions.
For the week to October 19, spec longs were increased by 8,844 contracts, while the shorts were increased by 1,720 contracts. Actual net long contracts are now 65,608 and net position is 26.9% long.
Technically, Monday session traded within the range set by last Thursday. There is feeling in the market that a flag formation is starting and market might fall into sideways trading pattern for the week to follow. Cotton price held well amid generally weaker market condition and rallied to gain a little ground prior to close.
Funds played active roles in pushing the spreads wider today in preparation of their front to back cover months switches. December / March contract spreads were as low as 414 points, and December 2007 / December 2008 spreads were 1,060 points the lowest.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
