Last week December 2012 Cotton opened at $71.50 and closed at $73.94. On Friday, August 3 cotton closed up $2.97.
On the daily chart below you can see that since the beginning of July cotton has been in a range between $70 and $73.40 with a secondary top at $74.00. The modified ADX shows this market to be in a very weak trend as numbers are at 16.8 and for the past week has been in a tighter range of 70-72. MACD has crossed up over the signal line and the zero on the histogram line caused by Friday’s price action along with Stochastics entering overbought territory. Technically, we need to watch for a correction down from $74.00, like we saw back in mid-June.
Proceed to Page 2 for the latest COT Data...
On the weekly chart you can see the last week there was a small drop in net shorts by Producers now at -43,562 contracts and Swap Dealers remained net long at 54,404 contracts, with Managed Money with a very small net short position of -2,458 contracts. For any prolonged move up we will need to see an increase in net shorts by Producers and a move into high net longs by Managed Money.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
Even with the Drought of 2012 the USDA is forecasting an increase in U.S. cotton production and a 46% increase in ending stocks to 4.8 million bales. Oversupply concerns will continue to keep December Cotton range-bound. Cotton has little incentive at this time to move higher because of heavy supply and weak demand.
So to answer the question regarding what is heavier, with all of the comments from above I have to say cotton. Have a prosperous trading week.
To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures