Rains in Texas were NOT too late to help cotton prospects and were even more abundant than forecast. Futures have been very weak as a result. Fund selling was aggressive last week as well. The CFTC report showed that collectively the trading funds unloaded over 10,000 contracts from their net long position. Cotton had closed lower 12 of the past 13 trading sessions before finally bouncing sharply higher Thursday morning out of clearly oversold conditions.
Nonetheless, there was little else for bulls to cling to before the rains came to Texas and even less now that they have. The trend is down, Thursday’s rebound notwithstanding. Old crop futures seem headed for a 62% Fibonacci retracement of the entire bull move from last fall, down to about 83.0.