July cotton experienced the lowest close since April 12, and the COT report showed that speculators still hold a historically large net long position. In addition, the report showed that speculators are in a long liquidation selling mode. Closing lower in ten of the past fourteen trading days leaves technical indicators oversold with slow stochastic under 10, but this is offset by the overbought condition of the COT report. Talk from India that the early arrival of the monsoons may have sparked some cotton millers to cancel import contracts helped to pressure as millers see odds of a large crop significant this season due to the jump in planted area. The weekly progress update in the US showed that cotton plantings are now 80% complete compared to 63% last week and 73% last year. The 10-year average for this time of year is 83%. The first conditions report of the year showed that 61% was rated good/excellent compared to 47% last year. The 10-year average for this time of year is 55%. Crop weather looks favorable for a good start to the crop and the conditions report shows the crop already above average. July cotton resistance is at 7747 with 7550 as support.
Jul ’17 Cotton Daily Chart