The cotton market is coming back from the Easter Holiday somewhat overbought as last Wednesday it posted an 11-year high. Currently, the market is trading inside Thursday’s high/low range.
Weather-wise, there is virtually no rain in the five-day forecast for West Texas. Although the six to ten-day outlook holds a tiny rain chance, the 8 to 14-day model reverts right back to below normal precipitation and above normal temperatures.
From last week’s export sales data we note that cumulative sales have reached 102.9% of the USDA forecast for the 2021/2022 marketing year versus a 5-year average of 99.9%.
Friday’s Commitments-of-Traders data showed that managed-money funds reduced their net long position 78,306 contracts. The data collected as of last Tuesday indicated speculators had sold some 1,195 contracts.
This Friday marks the last opportunity for traders to exit the spot May contacts. The delivery period comes on Monday, May 25.
For Monday, close-in support for May cotton is 140.05 cents and 139.07 cents, while resistance stands at 146.10 cents and 146.60 cents. The estimated morning volume is 5,764 contracts.
