Strong commercial buying finally broke the cotton market out of its recent sideways trend.

Comments:

December cotton finally broke out of its sideways trading pattern between 75.00 and 71.60, a range it had been locked in since posting the high on July 15. Futures spreads indicate the contract was driven higher by strong commercial buying interest, with the carry in the December-to-March weakening by 0.16. Technically, the breakout now points to an upside target near 78.50.

Fundamentally the market looks like it may be building toward the opinion USDA is set to lower new-crop ending stocks in its August round of Supply and Demand reports, set for release August 12. Weekly export sales and shipment numbers released early Thursday was viewed as neutral for the old-crop market.

General Comments:

December cotton gained 1.54 to close at 75.83 while March rallied 1.38 to 75.90. December corn finished 4 cents lower as November soybeans gained 1 1/4 cents and September Chicago wheat fell 7 cents for the day.

The U.S. dollar index was 0.187 higher at 95.750. December gold was $3.10 higher at $1,367.80 while September silver fell $0.056 and September copper lost $0.0250. The Dow Jones Industrial Average was 14 points lower at 18,340. September crude oil was $1.00 higher at $41.83. The September distillates (heating oil) contract gained $.0341 while September RBOB gasoline rallied $.0150 and September natural gas was $0.004 lower.