Picking up where it left off Friday, old crop cotton is lower while new crop is higher. Of course, the May and July contracts may still be smarting from Friday’s less-than-enthusiastic supply-demand update. Essentially, tabulators kept domestic ending stocks unchanged at 3.50 million bales but did increase world carryout by some 810,000 bales. In addition, the May contract is preparing for its delivery with its First Notice Day on Monday, April 25.
This past Friday afternoon, CFTC issued its Commitments-of-Traders report. The data showed that the closely watched managed money funds were net buyers for the week ending April 5. Their buying action increased their net long position to 79,501.
China continues to suffer from a massive COVID-19 outbreak, the worst in two years. Already the city of Shanghai has seen a massive shutdown of its 26 million residents. Now the southern city of Guangzhou is implementing restrictive measures. The bottom line is Chinese business, schools, and ports are being hugely affected.
For Monday, close-in support for May cotton is 131.00 cents and 128.50 cents, while resistance stands at 134.50 cents and 135.00 cents. The estimated morning volume is 7,056 contracts.