COTTON MARKET POSTS LARGE WEEKLY GAIN, SMALL MONTHLY SETBACK
Jul 31, 2022
Dec cotton gained 585 points on the week, finishing at 96.74, with the Dec – Mar inversion contracting to 323. Dec posted at 210-point setback for July. Last weekend, our proprietary models predicted a finish on the week that was to be near unchanged to higher Vs the previous week’s settlement, which proved to be correct.
• RETAIL SALES BETTER THAN EXPECTED • U.S. EXPORT COMMITMENTS INCREASED 213,200 BALES • BROAD SPREAD HEAT AND DROUGHT PUNISH SOUTHWEST CROP • FOMC RATE DECISION AND U.S. Q2 GDP AND CORE PCE FIGURES COMING
The market is moving sideways in low volume, stuck between supply side/inflation bulls and recession bears.
The mood of a market can often be gauged by the reaction to a report, like today’s dismal export sales report. While the initial reaction was negative, December managed to close with a small gain, 162 points off its intra-day low.
Market Moves Higher with Little Economic Data July 25, 2022
Over the past few weeks, the market resembles a rusty old truck trying to climb a rainy dirt road. Each time it seems to gather traction, it slips and slides further down the hill. That is until last week when it posted its first positive performance in six weeks.
Cotton prices blew through the 93-cent price resistance as suggested, albeit much sooner than I expected. Keep thinking patience as prices now look to trade the dollar mark. Beyond that, marketing fundamentals, particularly on the supply side of the price equation, are building an argument for trading to the 108-110-cent level.