Friday, July 18, 2008

Dec’08 open interest this morning was 165,242 contracts, down 3,887. Total open interest was 219,147 contracts, down 3,448. Certificated stocks total 1,715,082 bales, up 1,279 bales from the previous report. There were 18,042 bales awaiting review. The 2007/08 North European A-Index was down 50 points at 78.05 and the B-Index remains unquoted. The Far Eastern A-Index was down 55 points at 77.25. The 2008/09 Far Eastern A-Index was down 50 points at 79.30.

The following government prices are good through next Thursday, July 24th: AWP 63.43 (-0.19), and Pima Competitiveness Payment 00.00 (0.00).

As the option pit opened, Dec was trading at 73.51. Dec’08 trading volume up to now has been about 331 contracts. Dec opened this morning at 73.34 and made its current low of 72.84 at around 4:30AM. Dec’s current high of 73.80 was made around 6:35AM. In Chicago, the electronic grain markets ended their early morning session mixed with U-Soybeans up 6 ¼ cents, U-Corn down 3 ¼ cents and U-Wheat down 2 ¾ cents. Crude oil was currently trading down about 25 cents. The Dollar was trading just above unchanged. After the option pit opened, Dec trading remained very thin with Dec slowly trading up to it’s earlier high of 73.80. Dec stalled at this level for about five to ten minutes. Then the buying picked up and Dec quickly rallied up to a new high of 74.16(+105). Some profit taking then eased Dec down to 73.90. Dec then chopped between73.90 and 74.10. Little after 9:00AM Dec broke under 73.90 and moved down to 73.76. Dec then chopped between 73.80 and 74.00. Fifteen minutes later market sell orders swept Dec from 73.90 down to 73.09. Dec stabilized at this level and some short covering and new buying slowly moved Dec back up to 73.40. Around 9:35AM there was another wave of sell market orders which swept Dec down to a new low of 72.50(-61). Then over the next ten minutes Dec was able to recovery back up to 73.44. These large moves are the result of very small orders showing on both the buy and sell side of the screen. This last sell off was mostly the result of bearish option activity (selling Mch 75 cent calls). Dec then fell back to 72.95 and then moved sideways between 72.95 and 73.15. When the Chicago grains opened, Dec was trading at 73.11. Dec then moved up to 73.35. Trading then turned sideways with Dec chopping mostly between 73.35 and 73.13. Around 11:00AM, Soybeans and Corn started a sharp sell off with Soybeans trading down over 19 cents and Corn down over 10 cents. At about the same time Dec broke under 73.00 and traded on down to 72.87. Dec then bounced back up to around 73.20. Fifteen minutes later Dec came under another wave of selling with pushed Dec down to 72.61. Dec was able to hold this level and then started stair stepping higher. By 12:20PM Dec had recovered back up to 73.30. Trading again turned sideways as Dec chopped mostly between 73.30 and 73.11. Increased weakness in Chicago spilled over into our market. Around 12:45PM Dec moved from 73.15 down to 72.95 but quickly moved back over 73.00. Dec continue to climb up to 73.20. Around 1:15PM another wave of selling hit our market. Dec was pushed from 73.10 down to 72.81. In Chicago the grains continued to collapse with Soybeans down about 48 cents, Corn down about 22 cents. Dec continued to slowly work its way lower, trading down to 72.58. Dec then slowly ground its way back up to 72.93 which was reached just before the one minute settlement period. During this period Dec was hit by another wave of buying which sent Dec from 72.87 up to 73.47. Dec then continued to climb up to 73.77 to satisfy this late buying. Once this buying was finished, Dec fell back down to 72.98 which was Dec’s last tick of the session. Dec closed steady, settling at 73.24(+13).The straddles had another light trading day. The Oct/Dec straddle traded about 137 times, ranging from 282 to 290 points. The Dec/Mch straddle traded about 772 times, ranging from 550 to 530 points. Estimated volume was 9,400 contracts. Previous day’s volume was 14,590 contracts.

 

Daily Moving Averages:	Dec	Oct
3 Day Average	73.39	70.52
7 Day Average	73.30	70.40
21 Day Average	76.24	73.04
40 Day Average	76.30	72.90
50 Day Average	77.00	73.65
100 Day Average	80.28	77.24
RSI:	39.6	40.5

 

Contract	High	Low	Previous	Close	Change
Oct '08	71.18	69.71	70.29	70.35	+6
Dec '08	74.16	72.50	73.11	73.24	+13
Mar '09	79.55	77.91	78.53	78.64	+11
May '09	80.80	80.13	80.34	80.38	+4
July '09	81.70	81.70	81.69	81.63	-6
Oct '09	----	----	84.03	83.93	-10
Dec '09	85.43	84.75	85.54	85.42	-12
Mar '10	----	----	87.09	86.97	-12
May '10	87.50	87.50	88.09	87.97	-12
Jly '10	----	----	90.04	89.92	-12

 

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.