ROSE ON COTTON – COTTON MARKET FINISHES HIGHER ON WEEK AMID VOLATILE TRADING ACTION
Sep 27, 2021
The ICE Dec cotton contract commenced the week with a sharp break but finished with an even more impressive rally to finish up 366 points on the week at 95.99, with the Dec – Mar spread inversion ballooning to 142. Last weekend our models predicted a finish on the week that was to be near unchanged to lower Vs the previous Friday’s settlement, which proved to be incorrect.
After trading calmly in a narrow range for over a month, last week’s market activity was nothing short of a rollercoaster ride. Expecting a breakout of some sort at any time, we were jolted Monday as prices fell over three cents closing below 90 for the first time since August 3.
The cotton market nearly hit limit-up levels early Monday morning as a flurry of buyers chased the futures. Fears that the U.S. crop may come in smaller due to weather adversities, plus potential trouble with the Indian crop and outright technical buying sent prices to their highest levels in 10 years.
ICE cotton futures gained for a fifth straight session on Monday, climbing as much as 4% to a contract-high as funds stepped up purchases and demand from China, the biggest natural fiber consumer, remained steady.
The cotton contract for December rose 1.72 cent, or 1.8%, to 97.71 cents per lb, by 1:30 p.m. EDT (1730 GMT).
Earlier, the December contract jumped 4% to hit a contract-high of 99.86 cents per lb.