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June 01, 2023
Tentatively higher from an earlier low of $83.55, Cotton is up to $86.53 per pound today, adding $3.05, or 3.65%, to yesterday's closing price of $83.48.
New United States Crude Oil Inventories improved upon the previous -12.46 million figure while also exceeding analyst expectations with a reading of 4.49 million.
Uptick comes while some more positive signs for the Cotton future are out as highly important Crude Oil Inventories data from United States beat analyst expectations of -1.10 million with a reading of 4.49 million. Data for United States Initial Jobless Claims released today at 12:30 UTC is better than expected with 232,000, but worse than previous figure of 230,000.
Meanwhile, United States ISM Manufacturing PMI (May) released today at 14:00 UTC with a figure of 46.9, while the previous figure was 47.1.
Cotton made an initial breakout above its 200 day Simple Moving Average at $85.14, a potential indicator of a newly emerging bullish phase. Crossed the $84.15 Fibonacci level, next level is at $86.92. The Cotton future broke through the $84.53 resistance and climbed above it $2; next resistance level is at $85.48. Despite this, a "bearish engulfing" pattern — a scenario when a larger red candle engulfs a smaller green candle, at the top of a prevailing uptrend. Typically this is a signal of lower prices in the near term. Bollinger Band® analysis indicates that current price action is approaching the upper band at $88.23, thereby suggesting that ICE Cotton is becoming overvalued.
Overall, looking at the technical analysis landscape, it seems ICE Cotton likely to continue pointing upward in the short term.
This rally in the Cotton future's price coincides with other Softs as having closed the previous session at $178.65, Coffee is up 2.94% today to currently trade at around $183.9.
While Cotton is appreciating, other Softs are comparatively not doing so well — Sugar retreats 0.53% to trade around $24.61.
Also worthy of note, tomorrow at 12:30 UTC data for United States Non Farm Payrolls will be released, with an expected decline to 180,000 from the preceding figure of 253,000. Tomorrow at 12:30 UTC data for United States Average Hourly Earnings will be released, with an expected decline to 0.4% from the preceding figure of 0.5%. As things stand, upcoming United States Unemployment Rate data is projected to fall short of market expectations with newly published data of 3.5, following on from the preceding figure of 3.4. New data is set to be published tomorrow at 12:30 UTC.
The commodity has been trending positively for about 2 months. Having set a significant high of $146.62 11 months ago, ICE Cotton is trading 43.06% lower.
