If cotton is in a glut, why the high prices?

Market Pulse: September 10

Fundamentals

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. 

To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures

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