Cotton NY futures closed the week off by settling at just under 74 cents on the most actively traded December contract, over 100 point drop from last Friday’s close. Market was clearly under pressure during the course of this week. December has dropped over 6 cents since mid June. With lackluster trading and less than impressive volume, December was trading back and forth within the tight 73/75 range. Further decerting was seen daily and the total cert level is now at 145,841.
The traders commitment report, as on page 2, showed that specs continued to reduce their net long position in cotton by 4k bales and commercials continued to get less shorter by nearly 8k bales. Index traders too reduced their net longs marginally by 2,500 bales. The technical outlook on cotton futures is still negative, however, the market has run into congestion in the near term. A new low since the end of February this year was reached yesterday at 73.06. Any rebound attempt during the week was limited and capped under Monday’s range high. The market is vulnerable to a larger sell off, but is likely to continue the tight range in the near future.