The weekly USDA Export Sales data was supportive for cotton, since the old crop sales result was relatively large. That is, the 2012/13 total, at 237,700 bales topped comparable week-ago and four-week average levels by 13% and 46%, respectively. On the other hand, the 336,000-bale shipments figure was somewhat disappointing, since it fell 15% short of the previous weekly result.
Given those developments, it was not especially surprising to see nearby ICE cotton futures sustain their overnight gains through the balance of the trading session. Indeed, concurrent U.S. dollar weakness and surging prices in the equity, metal, energy and grain markets probably offered considerable spillover support. The weekly Jobless Claims figure was not helpful, but the strong company earnings reports seem to point to modest economic growth.
In fact, the inability of cotton futures to build upon their early gains and relatively weak close had to raise the eyebrows of pragmatic traders. That is, while circumstances seem quite supportive and the market appeared due for a technical bounce from the large losses suffered Tuesday and Wednesday, the subdued ICE performance was not what bulls were looking for. If traders do not see something more impressive during the days just ahead, they may decide that the path of least resistance lies to the downside.