Friday, May 9, 2008

The following government prices are good through next Thursday, May 15th: AWP 57.77 (-0.70) and Pima Competitiveness Payment 5.89 (+0.15).

There were 5 Cotton Notices issued today bring the total to date 3,010. The only issuer was Goldman-5 and the only stopper was Newedge-5.

May’08 open interest this morning before the notices was 310 contracts, down 70. July’08 open interest was 124,719 contracts, down 33. Dec’08 open interest was 102,141 contracts, down 63. Total open interest was 248,842 contracts, up 536. Certificated stocks total 1,335,293 bales, up 32,382 bales from the previous report. There were 118,254 bales awaiting review. The 2007/08 North European A-Index was up 50 points at 75.95 and the B-Index remains unquoted. The Far Eastern A-Index was also up 50 points at 74.25

At 8:15AM July was trading at 71.40. July had opened this morning at 70.85. July’s current low was its opening price and its current high is 71.65 made around 7.56AM. Some large offers (about 600 lots) appeared at this level and this finally backed the market off. The market had been steadily rising during the early morning hours. On this move down July reached 71.11. At the time of the release of the USDA US and World Supply/Demand Reports (full details of all this morning’s reports can be found at another section of our web site), July was trading at 71.30. Some good buying then entered the market and pushed July back up to 71.60. This move took out some of the heavy selling at this level. Unable to make new highs, some profit taking pushed July back down to 71.39. Then another surge of buying rallied July up to its earlier high of 71.65 and took out about 500 lots that were still offered around this level. July still was unable to make a new high but July only backed off about 10 to 15 points. At around 9:18AM July was able to inch through 71.65 and on up to 71.69(+84). In other markets, Crude Oil traded to another record high of $125.98 up $2.29. The Dollar was weak, down about 26 points per the Dollar Index. In Chicago the electronic grain markets ended their early morning session with Soybeans 15 ¾ cents, Corn up 8 ¾ cents, and Wheat 16 ½ cents. July trading then turned sideways as July chopped mostly between 71.65 and 71.50. Around 9:30AM, July extended this range to a new high of 71.70(+85). Trading had turned lighter and the market is probably waiting on the opening of the Chicago grain markets to make its next move. However, our market did not wait for Chicago. Little after 10:00AM another strong surge in buying pushed July through 71.70 and on up to a new high of 72.25(+140). At 10:30AM July was trading around 71.98. Soybeans opened 35 to 40 points higher and Corn opened 5 to 7 cents higher. This sparked July to move back up to 72.16. Around 10:38AM July came under some heavy profit taking and new selling which sent July back under 72.00 and then collapsing down to 71.22. July held this level and then rebounded back up to 71.64. Today’s report helped July’s rally but it also helped the July/Dec straddle to widen out to 868 points. With weakening grains prices, July came under some additional selling which pushed July down to 71.01. There were about 175 Julys wanted around 71.00. This was helping to hold July at this level so far. Around 11:35AM most of the Julys at 71.00 were taken out, but July continued to hold this level. Some short covering then lifted July back up to 71.20. About 10 minutes later July finally broke under 71.00 and then traded down to a new low for the day at 70.54(-31.). The break under 71.00 had touched off some Spec sell stops. July’s erratic trading continued with July bouncing back over 71.00 and then crept on up to 71.42. A recovery of about 10 cents in soybeans helped to bring this buying back to our market. July then chopped mostly between 71.40 and 71.00. Each up and down movement seemed to follow Soybeans movements. Around 12:45PM, July moved out of this pattern to the up side with the continued help of the improving grain prices. July charged up to 71.94. This level was hit around 1:15PM. About 30 minutes later July came under some selling pressure and fell to 71.35. During the one minute settlement period July chopped erratically between 71.73 and 71.48. July then traded up to 71.84. July’s last tick of the session was at 71.62. July closed firm, settling at 71.55(+70). Dec closed 868 points over July, settling at 80.23(+88). Today’s estimated volume was 19,500. Previous day’s volume was 11,795.

 

Daily Moving Averages:	July	Dec
3 Day Average	70.92	79.48
7 Day Average	70.18	78.59
21 Day Average	72.92	81.18
40 Day Average	74.37	81.78
50 Day Average	76.54	83.37
100 Day Average	74.66	80.31
RSI:	47.5	50.8

 

Contract	High	Low	Previous	Close	Change
May '08	72.25	70.54	70.85	71.55	+70
July '08	77.60	76.58	76.38	77.15	+77
Oct '08	80.73	79.20	79.35	80.23	+88
Dec '08	84.97	84.00	83.67	84.57	+90
Mar '09	86.37	85.46	85.08	85.96	+88
May '09	87.45	86.65	86.19	87.16	+97
July '09	90.00	90.00	87.09	88.06	+97
Oct '09	89.00	88.00	87.76	88.81	+105
Dec '09	----	----	89.54	90.46	+92
Mar '10	91.00	90.50	90.34	91.06	+72

 

Please address comments to Weil Brothers-Cotton, Inc., at weilbros@weilbros.com.

Additional Market Information, including Cotton Options, can be obtained from The New York Board of Trade.