The market finished mixed Thursday amid technical selling and geo-political fears. Over time, cotton has become technically overbought, meaning it has rallied furiously higher with little correction. In fact, the market had rallied some 14.00 cents higher in January alone. Thus, some traders are booking profits ahead of the three-day weekend.
Thursday’s weekly export-sales data provided little support. This week’s sales were some 150,000 bales compared to last week’s 180,000 bales sold. Shipments were off too but remained fairly close to the 300,000-bale export mark.
Friday afternoon, the CFTC will issue its weekly traders update. Last week saw that the managed-money funds had slightly reduced their net-long position, but since that time, the market has posted a meaningful high and has been retreating.
Traders are also preparing for spot March’s delivery. To avoid the notice period next week, participants must exit the March futures by Friday’s close. Coming into Thursday morning, March’s open interest stood at 16,000 plus contracts.
Thursday, March cotton settled at 121.93 cents, up 0.02 cent, July ended at 116.68 cents, down 0.10 cent and December finished at 102.31 cents, 0.51 cent lower; estimated volume was 26,225 contracts.