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ODJ Nybot Cotton Pre-Open: Follow-Through Sales; Short Cov Possible
-- A Bottom May Be Close To Being Established
By Alison Guerriere
New York, July 2 (OsterDowJones) - After touching new contract lows
Thursday, cotton futures at the New York Board of Trade may continue lower on
Friday, but could see some short covering ahead of the three-day weekend,
sources said.
Cotton futures are now very oversold, and technical indicators are showing
a divergence from price trend, which warns the funds that prices may turn
higher, said John Flanagan, president of Flanagan Trading Corp.
"Some funds have started to reduce their net short positions as a result,"
he said. "Still, the attitude of traders is decidedly negative and it may take
a significant event to shock traders out of their negativity."
Much of the week's selling was likely the liquidation of the overextended
trade long futures position, said O.A. Cleveland, a cotton marketing
specialist at Mississippi State University, in a weekly industry comment.
"Additionally, there is belief that some speculative fund business is
beginning to enter the long side of the market," he noted. "These two actions,
taken together, give support to the idea that the market is working overtime
in establishing a bottom."
However, Cleveland said the bear side of the market continues to pull the
most weight, but fresh support is attempting to "work its way into the minds
of the traders.
"The December contract can find support as long as demand does not
decline, a prospect that is not foreseen," he said.
Cotton futures entered new contract lows on Thursday on bearish options
activity as locals sold. Dec settled 112 points lower at 50.24 cents a pound.
The contract pulled higher at the open on fund buying before succumbing to
option selling pressure, traders said.
ODJ CORRECT: Nybot Cotton Review: Dec Hits Fresh Lows
(Correcting 8th paragraph to read "Next week's spec/hedge report should show a
decrease in the spec short position, he said." The version that ran at 1526 ET
(1926 GMT) read "Next week's spec/hedge report should show an increase in the
spec short position, he said.")
-- Locals Attempted To Push Futures Higher But Reversed
-- Sparks Cos Pegs US, World 2004 Production
-- Nybot Closed Monday
By Alison Guerriere
New York, July 2 (OsterDowJones) - Cotton futures settled lower at the New
York Board of Trade on Friday after breaking new contract lows on fierce
speculative selling and options play.
Dec settled off its contract low of 49.21 cents a pound at 49.56 cents,
down 68 points on the day.
Mike Stevens, analyst at Swiss Financial Services, said market players
have become resigned to lower prices.
"People have resigned themselves that the fundamentals will move along
with lower prices," he said.
The Dec contract continues to register new lows as selling in options and
speculator selling pressured the market, traders said.
"Locals tried to push it higher but that failed and they reversed their
positions," said a floor trader.
Stevens added that the trade has been a seller as open interest
rises. "There has been the establishment of a lot of new short positions."
Next week's spec/hedge report should show a decrease in the spec short
position, he said.
Private analysts Sparks Cos on Friday pegged U.S. cotton production for
2004 at 18.2 million bales, and world output at 105 million bales, traders
said.
This compares to the current 2004 U.S. Department of Agriculture estimate
of 17.6 million bales for U.S. production and a world crop estimate of 102.88
million bales.
Sparks was also said to have pegged U.S. carryout at 4.9 million bales,
according to traders, which compares to a USDA estimate of 3.9 million bales
from its June supply and demand report.
The Sparks report tells the market that as of June 2, there is no problem
in world production, Stevens said, as the estimate for world production
reaches high levels.
With new contract lows continuing to register, he said compared to
historical chart positions, cotton should be within 100 points of its last leg
of completion to the downside.
Volume remained light ahead of the three-day weekend. Final futures volume
was estimated at 8,000 lots with 4,000 puts and 5,500 call options.
The Nybot is closed on Monday in observance of Independence Day.
Settlement prices in cents per pound with intraday range:
Close Change Range
Oct 49.47 -0.60 49.20-50.30
Dec 49.56 -0.68 49.21-50.90
Mar 51.40 -0.74 51.15-53.00
Cotone in discesa libera - notizia del 02/07/2004
Le previsioni di un significativo incremento della produzione mondiale di quest’ anno continuano a penalizzare le quotazioni del cotone. Il contratto di dicembre (CTZ4) ha segnato ieri a 50,11 il nuovo minimo degli ultimi 12 mesi (ytd) ed alla fine ha perso 1,12 chiudendo a 50,24.
ODJ Nybot Cotton Pre-Open: Follow-Through Sales; Short Cov Possible
-- A Bottom May Be Close To Being Established
By Alison Guerriere
New York, July 2 (OsterDowJones) - After touching new contract lows
Thursday, cotton futures at the New York Board of Trade may continue lower on
Friday, but could see some short covering ahead of the three-day weekend,
sources said.
Cotton futures are now very oversold, and technical indicators are showing
a divergence from price trend, which warns the funds that prices may turn
higher, said John Flanagan, president of Flanagan Trading Corp.
"Some funds have started to reduce their net short positions as a result,"
he said. "Still, the attitude of traders is decidedly negative and it may take
a significant event to shock traders out of their negativity."
Much of the week's selling was likely the liquidation of the overextended
trade long futures position, said O.A. Cleveland, a cotton marketing
specialist at Mississippi State University, in a weekly industry comment.
"Additionally, there is belief that some speculative fund business is
beginning to enter the long side of the market," he noted. "These two actions,
taken together, give support to the idea that the market is working overtime
in establishing a bottom."
However, Cleveland said the bear side of the market continues to pull the
most weight, but fresh support is attempting to "work its way into the minds
of the traders.
"The December contract can find support as long as demand does not
decline, a prospect that is not foreseen," he said.
Cotton futures entered new contract lows on Thursday on bearish options
activity as locals sold. Dec settled 112 points lower at 50.24 cents a pound.
The contract pulled higher at the open on fund buying before succumbing to
option selling pressure, traders said.
ODJ CORRECT: Nybot Cotton Review: Dec Hits Fresh Lows
(Correcting 8th paragraph to read "Next week's spec/hedge report should show a
decrease in the spec short position, he said." The version that ran at 1526 ET
(1926 GMT) read "Next week's spec/hedge report should show an increase in the
spec short position, he said.")
-- Locals Attempted To Push Futures Higher But Reversed
-- Sparks Cos Pegs US, World 2004 Production
-- Nybot Closed Monday
By Alison Guerriere
New York, July 2 (OsterDowJones) - Cotton futures settled lower at the New
York Board of Trade on Friday after breaking new contract lows on fierce
speculative selling and options play.
Dec settled off its contract low of 49.21 cents a pound at 49.56 cents,
down 68 points on the day.
Mike Stevens, analyst at Swiss Financial Services, said market players
have become resigned to lower prices.
"People have resigned themselves that the fundamentals will move along
with lower prices," he said.
The Dec contract continues to register new lows as selling in options and
speculator selling pressured the market, traders said.
"Locals tried to push it higher but that failed and they reversed their
positions," said a floor trader.
Stevens added that the trade has been a seller as open interest
rises. "There has been the establishment of a lot of new short positions."
Next week's spec/hedge report should show a decrease in the spec short
position, he said.
Private analysts Sparks Cos on Friday pegged U.S. cotton production for
2004 at 18.2 million bales, and world output at 105 million bales, traders
said.
This compares to the current 2004 U.S. Department of Agriculture estimate
of 17.6 million bales for U.S. production and a world crop estimate of 102.88
million bales.
Sparks was also said to have pegged U.S. carryout at 4.9 million bales,
according to traders, which compares to a USDA estimate of 3.9 million bales
from its June supply and demand report.
The Sparks report tells the market that as of June 2, there is no problem
in world production, Stevens said, as the estimate for world production
reaches high levels.
With new contract lows continuing to register, he said compared to
historical chart positions, cotton should be within 100 points of its last leg
of completion to the downside.
Volume remained light ahead of the three-day weekend. Final futures volume
was estimated at 8,000 lots with 4,000 puts and 5,500 call options.
The Nybot is closed on Monday in observance of Independence Day.
Settlement prices in cents per pound with intraday range:
Close Change Range
Oct 49.47 -0.60 49.20-50.30
Dec 49.56 -0.68 49.21-50.90
Mar 51.40 -0.74 51.15-53.00
Cotone in discesa libera - notizia del 02/07/2004
Le previsioni di un significativo incremento della produzione mondiale di quest’ anno continuano a penalizzare le quotazioni del cotone. Il contratto di dicembre (CTZ4) ha segnato ieri a 50,11 il nuovo minimo degli ultimi 12 mesi (ytd) ed alla fine ha perso 1,12 chiudendo a 50,24.
