THE back and forth nature of our market continued with futures giving back a large chunk of Friday's gains as prices continue to go nowhere.
Cotton continues to move back and forth without much conviction despite the recent release of China Reserve stock and on the other side, the recent good export sales activity over the past few weeks. The current trading pattern dates back nearly a month now.
China continues to both buy and sell for the Reserve while traders mentioned some export demand is still kicking around with Indian cotton reportedly in the mix.
Futures volume was estimated at 13,407 contracts as compared to Friday's shortened session of 13,604 contracts.
Technically, today's session was an inside day with a lower high and higher low than Friday. Cotton continues its back and forth pattern apparently stuck between good export demand below, and residual grower sales on top. Tuesday's CFTC data showed Specs were small net buyers for the first time in seven weeks.
I believe it would take a move above the recent highs if we are to see more of that type of buying.
Meanwhile, we have the December Supply and Demand report due out next week.
It will be interesting to see if there are any major adjustments to the global balance sheets (China?) and perhaps more importantly to the US balance sheet.
Recent strong export sales activity has some traders saying it is a matter of time before the USDA will be raising the US export forecast.