Cotton Moves Sideways

The cotton market seems to be momentarily content with a sideways trading path, albeit at a 10-cent higher level. The market remains somewhat technically overbought with the two ways of correction being: (1) trade lower; or (2) trade sideways. Wednesday afternoon the Federal Reserve will publish its interest rate consensus.

Spot May contract is in delivery. Wednesday there were zero notices issued. Thus far, 178 notices have been issued. May’s delivery period runs through May 6.

Crude oil remains very strong as the UAE (United Arab Emirates) has pulled out of OPEC. Also, the U.S. now says she will resort to placing an even tighter noose about the Strait of Hormuz. Hopefully, the move will force the IRGC to capitulate via economic means. 

Thursday, USDA will issue a new round of export sales. Last week, net sales were 120,000 bales, off 26% weekly, while shipments were 296,000 bales, down 3% week-over-week.

On Friday, the CFTC will update its Commitments of Traders information. Last week, the report showed managed-money funds bought some 17,000 positions, strengthening their net-long carry to 34,464 contracts.

Chart support for July cotton stands at 78.85 cents and 78.00 cents, with resistance around 80.55 cents and 82.00 cents. Wednesday morning’s estimated volume is 7,872 contracts.

Keith Brown can be reached at commodityconsults@gmail.com or by calling (229) 890-7780.