First notice day for nearby May ICE cotton futures came and went with little news late last week. ThatΆs also a big reason trading in that contract has essentially dried up; the industry is now using the July future as its benchmark price. TodayΆs late report stated the number of delivery notices posted against the May future today at 26 contracts. These limited numbers might have encouraged bulls in some instances, but that didnΆt seem to be the case this time, as exemplified by the slippage experienced by the old-crop contracts today.

I tend to think todayΆs action was largely technical in nature, especially after bulls proved unable to push the July contract price decisively above chart resistance around 93.50 last Friday and again this morning. As the chart above shows, July futures reversed sharply to the downside after the early failure. On the other hand, bears rather obviously failed to mount a serious test of support associated with its 40-day moving average(blue line) either. ThatΆs obviously a major pivotal point from a technical perspective.

On the other hand, the late-afternoon Crop Progress report could push the market strongly in one way or the other if it contains any major surprises, but that seems pretty unlikely at this point.