US dollar continued to be strong and the overall commodity complex traded lower Friday. As we keep failing to breakthrough the resistance at the top of the range, we may see some more spec liquidation down the road. NY cotton futures slid lower in tight trading range today, and the failed probe over 82.50 this week pushed July contract to test towards the bottom of the current trading range. However, mill demand is under the market and will certainly be supportive on dips. Support is held around the 80 cent area on July.
The trader’s commitment report for the week ending May 11th shows further liquidation on the non commercial side. Index trader also reduced their net long cotton holdings marginally, while commercials took the opposite side of the trades. Charts are posted on page 2 of this report. Over the course of this week, cotton generally preformed better than the broad outside market and July contract closed the week unchanged from a week ago. Cert stocks keep growing and is likely to keep a lid on futures prices. We look to demand situation especially that from China for further direction on the market.