The cotton market was off less than 0.50 cent, despite the fact the Dow Jones collapsed over 1,100 points! The bearish driver of the Dow was the potential that Russia invades Ukraine. Monday, many NATO countries are sending supplies and troops toward Ukraine as a deterrent to the Russians.
Cotton prices posted gains for yet another week, but not quite with the pizazz of those prior. March futures closed at 120.75 for a gain of 105 points while new crop futures settled at 98.85 for a gain of 202 points.
Could this be the tapping of brakes in an overbought market primed for a correction? It would not be a surprise considering the torrid pace we’ve been on. Though new highs are likely, one can expect greater volatility over the coming months.
MARCH FUTURES HIT HIGHEST PRICE SINCE JULY 2011 • EXPORTABLE GOODS COMPETITIVELY PRICED • DEMAND REMAINS EXTREMELY ROBUST • MOST OF WTX/OK/KS TERRITORY IN SOME DEGREE OF DROUGHT
Cotton futures made up for the shorter trading week with more price action. March futures traded higher three of four sessions, posting an 8.54 cent range and making a new life-of-contract high at 124.78 cents per pound, which also happens to be the highest price since July of 2011.
Market Movement from 17th Jan 2022 to 22nd Jan 2022.
• Another week of huge volatility on NY cotton future market.
• NY March posted contract high and decade high to 124.75 intraday on Wednesday. Indian agency has reduced Indian crop size which also was taken positive by NY future market. Technically now new top so, some short covering; some mill fixation has triggered new high. Thursday and Friday there was correction due to profit booking.
Today’s on-call report is worrisome, since it showed that very little progress has been made with March fixations. This will most likely lead to further price spikes due to sell-side illiquidity, as trade shorts (mill fixations) still have to cover over four million bales in a matter of just 3-4 weeks.