Cotton comment
FUTURES spreads reversed overnight as July setback from three week highs while Dec rallied.
July settled at 75.09, down 0.48¢.
Dec settled at 70.41, up 1.57.
Commentators note that the move appeared to be rebound rally, which could be related to short covering in Dec after the Jly/Dec spread traded at a high of 7.24¢ Jly over Dec on Tuesday.
Little changed fundamentally except that 9770 bales of exchange stocks were decertificated; this may be part of the explanation for the recent strength in the July as the notice period approaches.
The July turned lower after rallying to three week highs.
Alternately, Dec, rallied above 70¢, despite improved moisture conditions in the US during the past few days.
Cotton may also have received some support from a weaker USD but outside markets were mostly lower.
Jly open interest declined by 8,596 contracts to 47,763 yesterday; Dec OI increased by 3687 to 122,175,the highest for an individual contract in a while.
This in itself could add to volatility.
China's CCIndex declined a further 16 yuan to 18,405.
E-platforms were mixed in light trading.
Cash market inquiry remains lacklustre.
Rumours of more cancellations of higher priced previous sales continue to circulate.
