Fundamentally, the current situation in the global market of cotton hasn’t changed. Over the last 2 days the market has been rallying. Yesterday the price hit the daily limit. That is why there was no trading during the last 6 hours of yesterday’s trading session.
This may be a strong indication of a further rally towards the upper border of the 90-110 range, which was mentioned in the previous articles. The news background seems to have seen no major bullish changes so far. There are some problems with the US harvest, but they are taken into account in the latest report by the USDA.
According to the Department of Commodity Trading, , are also waiting for September, when China is expected to start buying up cotton. There are rumors that China deliberately underreports the volume of its future import in order to not make cotton grow in price further. Consequently, there won’t probably be any major breakout until September and the price will stay within the abovementioned range.
Technically, the price has encountered considerable resistance - the 50-day moving average. The market volatility is high as the September options are about to expire. The Department of Commodity Trading keeps monitoring the market.
