Market Movement from 12th Apr 2021 to 17th Apr 2021
• After weak opening of NY Futures on Monday, NY May future was able to close the week with 131 points gain and July future gained 129 points. Strong dollar put pressure on future market but technical and fundamental both supported uptrend in the market. Some weather report and outside forces weighed on the market. May future is now close to expiry and trade rolled over to July. May-July spread give full carry.
ICE Cotton eases but still poised for 2nd straight weekly gain
ICE cotton futures fell on Friday, retreating from a 1-month peak hit in the previous session, but hopes for an economic rebound, dry weather concerns in West Texas and a softer dollar kept prices on course for a second straight weekly gain.
The cotton contract for July fell 1.28 cent or 1.5% to 83.74 cents per lb by 12:41 p.m EDT (1641 GMT). It traded within a range of 83.62 and 85.1 cents a lb. Prices hit the highest since March 19 on Thursday.
There was a huge disparity in the spread activity between old- and new-crop markets Friday. The obvious difference we would attribute to speculators rolling out to the December contract. With delivery for spot May one week from this Monday, and the potential for worsening adverse weather for West Texas, it appeared some traders preferred to bypass the July futures altogether and to take their chances out in the new-crop contracts.
July managed to hold above its long-term uptrend line dating back to April of last year and over the last six sessions it also broke away from its short-term downtrend line that had its origin in late February.
This has switched the signal for speculators back to ‘green’, while trade shorts are now scrambling to fix on-call sales after missing an opportunity to do so several cents below.