Wheat locked up the limit again overnight and fed a mini rally in the other grains and cotton as we made new highs, but came off on the open outcry start this morning. Beans, corn and wheat almost got back to unchanged, while cotton found support at 150 pts lower.
However, the fund and spec buying was ready to catch the drop and pushed everything back up to test the highs as we traded in a volatile 300 point range. Volume was strong again today with 51,000 futures and 41,000 options as the K'08 set a new record high close.
There are rumors that sales later this week will be strong again as China was an aggressive buyer on the break after Chinese New Year. We have now reached levels that make new sales very difficult and offers are now based on K'08 which is over 10 cents higher than the last business that was done.
We are reaching overbought signals from record high volatility, open interest, spec-long position, cert stocks, unredeemed loan cotton and a relative strength index in the mid 70's. However, wheat managed to close up the limit again and the dollar index fell to record lows which should keep the upside momentum in place for now.
Technically, we have broken all upside resistance targets and are feeding off bullish commodity sentiment. May set new record highs as we are now reaching a relative strength index at 76 and into overbought territory. The market is trading at 4 year highs and finding very few sellers scale up.
May has now rallied 10 cents from the low set only 2 weeks ago. General market mood is bullish on technicals and outside commodities market. We will have to see a pull back in the grains before cotton will have a chance to correct. Demand will certainly slow down in the short term, but fundamentals are no longer in charge.
However, the fund and spec buying was ready to catch the drop and pushed everything back up to test the highs as we traded in a volatile 300 point range. Volume was strong again today with 51,000 futures and 41,000 options as the K'08 set a new record high close.
There are rumors that sales later this week will be strong again as China was an aggressive buyer on the break after Chinese New Year. We have now reached levels that make new sales very difficult and offers are now based on K'08 which is over 10 cents higher than the last business that was done.
We are reaching overbought signals from record high volatility, open interest, spec-long position, cert stocks, unredeemed loan cotton and a relative strength index in the mid 70's. However, wheat managed to close up the limit again and the dollar index fell to record lows which should keep the upside momentum in place for now.
Technically, we have broken all upside resistance targets and are feeding off bullish commodity sentiment. May set new record highs as we are now reaching a relative strength index at 76 and into overbought territory. The market is trading at 4 year highs and finding very few sellers scale up.
May has now rallied 10 cents from the low set only 2 weeks ago. General market mood is bullish on technicals and outside commodities market. We will have to see a pull back in the grains before cotton will have a chance to correct. Demand will certainly slow down in the short term, but fundamentals are no longer in charge.
