Cotton continues to trade in a narrow sideways range between 80/82 cents. The volume is light as mills are trying to delay purchases until they can reach the cheaper back months. China announced more import quotas in order to soften the local high prices. Also, the southern hemisphere crops in Brazil and Australia are also helping to relieve the pressure in NY.
The market has good support under 80 cents as mills will certainly be interested scale down. However, the upside also feels limited as new crop is well underway and off to a good start. The specs continue to liquidate their long position as shown on page 2 going from 14.1% to 12.5% long this week. For the short term the market feels range bound with possibly further down side testing going forward.