MUMBAI (Commoditiescontrol) - For the week ICE cotton most active march contract was up 1.40 cents and stood 3.24 cents above the January low of 70.65 cents.
While, US spot cotton seven designated markets averaged 68.77 cents per pound for the week ending Thursday, January 17, 2019, up 61 points from last week.
Market closed positive for 3 consecutive days out of five trading days. Like last week, market traded in a band of 70.65 -73.95 cents . But on Thursday it managed to break this band and close higher at 74.37 cents on the optimism of easing out of US-China trade war and amid the news that global crop estimates could be revised down for India, once USDA resumes operation. Strong crude oil also supported the upside move.
Total open interest gained in every trading session except for Wednesday and Thursday when it declined by 235 and 725 lots with corresponding gain in price by .82 cents and 1.1 (most of the gain for week was in these two sessions only) indicating short covering in the market.
Since most of the gains were due to short covering and relative gains in spot market which is not same as futures markets, sustainability of this rally appears to be doubtful. Further most of the positive factors such as easing of US-china trade war, lower crop estimates for India and US and high crude price are already discounted to a large extent.
But at present market is optimistic about the outcome of US-China meeting and this optimism may help market to move up further. Outcome of US-China trade talk will decide next directional move for the market till then market may trade in range of 70-77 cents/lb.
(By Commoditiescontrol Bureau)
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