July cotton traded in a 90 point range today as traders await the release of the USDA's Crop Production Report, which will be released at 7:30am CST. The USDA will be releasing for the first time the supply and demand numbers for the new marketing year (2008-2009). Traders are not expecting much of a change in regards to U.S. demand. The USDA reports in the last few months have shown ending stocks increase due to the decline in demand. Traders will be looking at production estimates as U.S. plantings are expected to be the lowest in 25 years. If we do not get any surprises in this report, the market could revert back to the near term fundamentals. The market has been pressured and the upside limited because of what I mentioned earlier, weak demand and increasing stocks. In addition, cotton plantings have gone smoothly. Barring a surprise rpeort, I am looking for July prices to re-test the December 2007 low of 66.13. Support for July is at 70.00. Resistance is at 72.00.
Boyd Cruel
Alaron Research Team
800.216.1491
bcruel@alaron.com
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