March closes at 54.56, (-0.33). So, what happened to all of the fund buying? Spec/Hedge shows specs holding net long 7.4%. Since Friday, cotton prices have tumbled almost 300 points from the opening high of 5700. Today was no exception as prices failed in an early effort to get above 5540 in March, a spot where it met strong resistance late in yesterday’s session.
The pressure cotton prices have experienced has stemmed from a strong bearish posture in options and has gained steam while anticipated fund buyers apparently have backed off, or aren’t prepared as of yet to go forth acquiring contracts as had been widely believed. Perhaps timing plays more of a roll and this awaited fund buying may still materialize, but for now things no longer look optimistic for cotton prices.
I should expect a range to develop between say 5350 and 5700, with the recent low of 5410 awaiting a likely retest sooner than later. Charts don’t appear attractive and may in fact result in additional long liquidation and sellers once again have the upper hand.
It will probably take significant news to perk buyer interest unless the charts improve. On a positive note, I hope to have my new booth available soon to begin servicing customers from the trading floor. Until then, if you’d like to reach me, try my cell phone, 973-652-4694
Jurgens H. Bauer