USA:Cotton prices show an oscillating trend

Despite cotton's strong close on Friday above key moving averages, prices labored in early trading. Bulls seemed to be kept at bay by an early morning order to sell 700 plus July showing on the screen at 7200.
Midmorning, after backing off only slightly, prices started to slip a bit and suddenly caught most traders off guard as sell stops were triggered finding a void of bids. Prices sold off 170 plus points from the early highs.
Exactly what prompted the sell off was not at all clear. Traders assumed weak soybeans, firm US dollar and favorable weather forecasts probably all played a part but the sell off was fast, furious and mostly technical.
One batch of sell stops when 7160 was broken but when the early morning lows of 7134 fell, prices dropped 100 points in less than 2 minutes. Buyers quickly tried to take advantage of the drop but for the most part were too late and were forced to chase values.
Prices spent the remainder of the session recovering the losses. Despite the fast, fleeting sell off, cotton futures settled only 4 to 15 lower on the day and within 9 to 15 points of their early highs.
Technically, buy stops will be found above the 7243 high of May 1st with sell stops below last weeks 6955 low.
The bottom line, is we are still stuck in the range of the last three weeks, but today's impressive recovery reinforces two points. First, the necessity for potential buyers to be ready at all times, having their orders in place or risk being left at the gate and secondly, that despite the bearish fundamentals, the bulls are not ready to give up and have the buy stops above 7250 in their cross-hairs".

As of last Friday, the spec community had increased its net long position to the equivalent of 11 percent of the open interest up from 10.4 percent a week earlier. Spec longs increased their positions by 6,196 and their shorts by 3,774. Commercials added 2,543 long hedges but 4,965 short hedges.
Open interest in cotton futures jumped 8,739 contracts last week, 3,187 which came on Friday Certificated stocks this morning were reported at 1,463,264 with another 80,237 awaiting review. Of the cert stock, 1,086,891 are from the current crop and have no "year of growth" penalty attached.