A very quiet trading session today when NYF resumes after the 4th of July holiday yesterday. USDA export sales report is delayed due to the holiday. Volume is a merely 4,018 contracts traded on the floor and 4,179 contracts traded electronically.
Dec07 traded within the tight range of 50 points during the session. Prices in the early morning were supported by the higher CBOT grains market and driven higher by fund electronic buying to test the 64 cents level. Pressured by trade selling and lack of momentum, December is traded between 6380 to 6390 from mid session and closed at high.
Moderate to exceptional drought condition still continues centered on the Tennessee River Valley states, with an outer tier of states (Louisiana, Arkansas, Missouri, the Carolinas, and Virginia) that are abnormally dry.
At the same time, the 7 day cumulative rainfall totals through July 1 highlight significant accumulations in North Central Texas, Oklahoma, Kansas, Missouri, and across Tennessee to South Carolina.
Scattered to widely scattered showers have been seen in the Mississippi Delta area, thus leading to improved conditions for the developing crop. More rain is still needed across the Southeast states to alleviate the drought conditions.
More rainfalls are expected in Texas for the rest of the week. Even though most of the excessive rain and flooding have missed key cotton production areas, the wet and cool conditions have not been supportivefor the cotton development for this area.
Another strong close today, and it looks like the correction we have been waiting for - to retrace part of Dec07 contract’s recent gain of 13 cents since May - has not happened. Technically, the market continued its sideway trading pattern this week and looks to break out one way or the other.
Momentum wise the market did not support the price surge from spec buying on the close, and failed to rise past the immediate upside 64 cents level. Moving averages remain strong and supportive at the moment, setting 9 day average at 6246. The 50 day average at 5692 should continue to chase prices up.
