USA: Cotton Market Fundamentals Continue to Look Bearish

Cotton traded in a similar trading range as we continue to find strong resistance near 72 cents. Volume was light with only 12,000 futures and 6,000 options as we are unable to breakout of the trading range established on May 1st. Inquiries are still active and there should be another good sales and export report this week although maybe not as strong as the recent two weeks.

Mills are still buying hand to mouth so in case prices do not go higher soon, we may see a pull back in demand waiting for lower prices. However, at the moment we still have a huge spread to December so mills will be nervous not to cover at least until the third quarter which should keep the market firm short term.

Source: ECOMUSA Inc