Cotton Mulls The Upside

After a nearly seven-week bullish romp, which has flipped the once-bearish funds and rushed the ICE futures to contract highs, the cotton market has definitely become overbought. Naturally, such a situation is not an automatic sell signal, but it does give traders and hedgers pause. Thus, additional new and friendly news needs to emerge to further fan the bullish flames.

Tuesday, President Trump extended the timeline for the ceasefire to give the infighting Iranians more time to bring a cohesive message to the negotiation table. Most financial and commodities markets are breathing a collective sigh of relief Wednesday morning.

This Thursday at 8:30 a.m. EDT, USDA will issue a new round of export sales. Last week’s tally showed net sales of 161,500 bales, off 50%, and exports were 305,000 bales, down 11% weekly.

First notice day for the May contract is April 24. Its delivery period runs through May 6.

Also, on Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of Traders standings. Last week, for the first time in some two years the managed-money funds had reversed to a net-long position. Currently, they are net long some 16,000 contracts.

Chart support for July cotton stands at 79.50 cents and 78.60 cents, with resistance around 82.00 cents and 82.75 cents. Wednesday morning’s estimated volume is 20,841 contracts.

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