Solid buying from both sides of the market had cotton contracts trading near session highs at TuesdayΆs close. The July contract was 1.73 higher, the December was up 1.58, and the March posted a gain of 1.55.
The new-crop December contract continues to extend its rally off the recent test of technical price support at 83.04. So far this week the contract has rallied almost 3.50 off last weekΆs low, yet technical indicators continue to show the market in its seasonal downtrend.
Despite this, the December contract could soon test its recent high of 89.20 (week of March 11). Light commercial support was seen late in the day as the carry in the December to March futures spread weakened slightly.
Also, the old-crop July contract continues to gain on the December hinting at increased short-term demand. If this demand is confirmed it could provide the support to push the July contract to a test of its recent high of 93.93.