Flooding in the U.S. Southeast led to solid buying from both commercial and noncommercial traders Monday.
Comments:
The cotton market continues to see strong commercial buying, reflected in the May-to-July spread sporting a stronger inverse at Monday’s close. This could be a result of ongoing strong export demand, following up with what has been reported in weekly Export Shipment reports recently. This move has created strong minor (short-term) and secondary (intermediate-term) uptrends on May cottonΆs daily and weekly charts respectively.
Additional support came from noncommercial short-covering tied to headlines regarding flooding in the U.S. Southeastern Delta growing region. This group of traders is quickly abandoning those positions despite the continued rally in the U.S. dollar index. Reasons why include the continued historically low price and the previously mentioned strength of the nearby futures spread.
General Comments:
May cotton closed 1.14 higher at 58.29 with July up 0.87 at 57.90. May corn closed 3 3/4 cents higher, May soybeans finished unchanged, and May Chicago wheat closed 3 cents higher. The U.S. dollar index was up 0.470 higher at 96.642. April gold was $23.20 lower at $1,236.20 while May silver was $0.16 lower and May copper fell $0.010. The Dow Jones Industrial Average was 42 points lower at 17,255. April crude oil was $1.23 lower at $37.27.
