This past week we saw numerous headlines regarding the large supplies of cotton worldwide. One actually said countries like China have a glut of cotton. Since the first of August we have seen cotton prices trading near $0.70 per pound and now cotton is trading at $0.76 per pound. Why the rise?
Last week Dec Cotton opened at $0.7728 and closed the week at $0.7580.
Proceed to Page 2 for the latest COT Data...
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...
On the daily chart below you can see ADX is now at 25.1 and has stopped dropping. DI+ is just starting to move up away from DI-. Current trend strength is flat. MACD is riding just below the signal line with no divergence and we see a correction in Stochastics from overbought territory, but are on the rise again. Will cotton retest $0.77 this coming week? Let’s see the weekly chart.
On the weekly chart, you can see that producers have been adding to net shorts for some time and are now net short -58,872 contracts. Managed Money has been adding to net longs and now are net long 18,540 contracts. Swap Dealers have once again added to net longs this past week and are now net long 51,722 contracts. The push by big money actually started back in early August when cotton was trading near $0.70.
Isn’t it slick that even with large cotton supplies worldwide how an increase in buying and selling by big money can affect price. Will cotton continue to rise? That will most surely depend on increasing or decreasing buying and selling.
Have a prosperous trading week.
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