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Why Implied Volatility Is A Critical Tool For All TradersTraders and investors use different sets of tools when approaching markets. Some are fundamentalists, pouring through balance sheets, supply and demand data, and other macro and microeconomic information to predict the future prices of assets. Others have a strictly technical approach to markets, following trends and the path of least resistance of prices. Still, others combine the two to look for opportunities where fundamental and technical analysis merge to improve the chances of success. The past is history; the present is all that matters for traders and investors Historical volatility is a map of the past price variance for asset prices Implied volatility is a real-time sentiment indicator The primary variable determining put and call option prices The three critical factors implied volatility reveals Yogi Berra, the hall of fame catcher and armchair philosopher, once said, “The future ain’t what it used to be.” All market participants have the same goal, to increase their nest eggs. Projecting the future is the route to achieve their goal. Implied volatility is a tool that all market participants need to embrace as it is a real-time indicator of market sentiment. The past is history; the present is all that matters for traders and investors History depends on interpretation. When it comes to markets, Napoleon Bonaparte may have said it best, “history is a set of lies agreed upon.” An asset’s price moved higher or lower in the past because of a collection of variables viewed through a prism that leads to a collective conclusion that has broad acceptance but may not be accurate. Taking a risk-based position on an inaccurate conclusion could lead to mistakes and losses. When we consider buying or selling any asset, all that matters is the present. The current price of any asset is always the correct price because it is the level a seller is willing to accept and a buyer is willing to pay in a transparent environment, the market. Historical volatility is a map of the past price variance for asset prices Historical volatility is an objective statistical tool that defines the price variance of the past. Any disclosure document tells us that past performance is no guaranty of future performance. We must view historical volatility precisely the same way, with more than a grain of salt. Historical volatility is a guide, but remember what Yogi said, “the future ain’t what it used to be!” We calculate historical volatility by determining the average deviation from the average price over a given period. When it comes to math, the formulas are: A simple explanation of the complicated formula comes in seven easy steps: 1. Collect the historical prices for the asset 2. Compute the expected price (mean) of the historical prices. 3. Work out the difference between the average price and each price in the series. 4. Square the differences from the previous step. 5. Determine the sum of the squared differences. 6. Divide the differences by the total number of prices (find variance). 7. Compute the square root of the variance computed in the previous step. Implied volatility is a real-time sentiment indicator While we can calculate historical volatility from historical data, implied volatility is a different story. Implied volatility is the expected or projected volatility or price variance of an asset over time. We back into calculating implied volatility using an options pricing model. We can establish an implied volatility reading by entering the option value into the Black-Scholes options pricing formula or other formulas that determine options prices. If we have a put or call options price, we can solve for the implied volatility level. The Black-Scholes formula in mathematical notation is: The primary variable determining put and call option prices There are no option prices without implied volatility as it is the critical variable that determines put and call option values. Yogi also said, “You can observe a lot by watching.” The current implied volatility level is the market’s consensus perception of what volatility or price variance will be during the life of the put or call option. Observing and watching reveals the constant changes in implied volatility levels, which can be highly volatile over time. Option traders call an option’s sensitivity to changes in implied volatility Vega, which measures the change in an option price for a one-point change in implied volatility. Implied volatility is constantly changing. Yogi had another great saying, “If the world were perfect, it wouldn’t be,” which rings true for implied volatility which can change in the blink of an eye. Option traders pay lots of attention to their Vega risk as the volatility of implied volatility can be…highly volatile! How’s that for a tongue twister? The three critical factors implied volatility reveals Implied volatility is a valuable tool for all traders and investors for three significant reasons: It is a real-time indicator of the market’s perception of the future price range of an asset. It can change suddenly, and changes often occur before the price of an asset reacts, making implied volatility a leading indicator. Implied volatility reflects the wisdom of the crowd, and crowds tend to make better decisions than individuals. Moreover, it is reading that reflects the present, not the past, and is a constantly changing measure of consensus forecasts for the future. As traders and investors, we exist in the present. We attempt to increase our wealth with long and short risk positions that either add or subtract from our nest egg in the future. Implied volatility is a critical measure we should understand, utilize, and always keep in our toolbox. Any project requires the right tools. Implied volatility’s value is that it reflects a snapshot of the current market’s consensus. Historical volatility depends on “Deja vu” happening “all over again.” Implied volatility is a measure that understands that the “future ain’t what it used to be.” ----- Register for our Monday Night Call using the link below. You can view this full article (with specific examples) and get early access to future articles for free using the other link below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
ICEUS:CT1!Education
by Andy_Hecht
18
Cotton.Short lower level 92$Global trend long, local trend short.We have key level 92$.Price cinfirm this level few times so we know-there are some bulls and lower this level they have stop losses.When price will broke this level I expect thet bulls will close their long possision and bears will open short possision so we should get some impuls down.With entrens be attention with next things : 1.Open possision only with low volatility. 2.Stopp loss not more then 20 cents. Keep in mind that Cotton have some support level on 91$ so cover part of your possision few cent before this level :)
ICEUS:CT1!Short
by YevheniiZakhachenko
COTTON - 12% LOWER SINCE OUR LAST POSTOn our main Futures trade, Cotton has indeed gone in our direction by a massive 12%. We told you guys, some might consider it a 'boring' trade, more excitement in trading cryptos and indices or forex but as we stated before 'Cotton is Soft and Predictable', an asset worth your attention. Cotton stands for seasonality and this makes trading CT1 a rather predictable exercise. Take a look at the chart and tell me if you like it. Also look at my previous idea and how well it worked! Be inspired, don't look only for adventures but also for ''easier' trades. Take a look at our previous ideas and how nicely we managed to ride this price on the way up (perfectly) and on our way down (perfectly again). one love, the FXPROFESSOR
ICEUS:CT1!Short
by FX_Professor
3
Weekly cotton market review 12/21/2020.Support us by consulting our free magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed higher at $77.16 cents per pound. Cotton prices ended up sharply last week returning to pre-pandemic levels and 2019 highs. ICE U.S. cotton stocks were down to 78031 bales. Total cash transactions were 782746 bales this week compared to 630082 bales the previous week, an increase of 152664 bales this week compared to 98938 bales the previous week and 109251 bales at the same time last year. Demand has been good, with China, Korea and Vietnam showing interest. Harvesting is complete in most areas, but continues further north in Oklahoma and Kansas. According to the latest USDA report, the 2020/21 global cotton production forecast has been revised down to 113903K bales from 116112K previously. The decrease is due to the U.S. and Indian production. World cotton consumption estimates have been revised upwards to 115625K bales from 114050K previously. The 2020/21 market will therefore be in deficit, with a drop in stocks to 97520K instead of the 101435K initially forecast. The stocks according to the forecasts will therefore be down but historically high. On the international level, the Republican leader of the senate Mitch McConnell announced Sunday evening that a 900 billion agreement would have been reached. The Fed said its purchases of securities would continue at the current pace of $120 billion per month until substantial additional progress has been made. The brexit saga continues, with the European Parliament's Sunday night deadline for a deal passed, but negotiations will continue. No one seems to want to take responsibility for a possible failure. After Pfizer, the FDA also approved Moderna's vaccine. As far as the pandemic is concerned, the vaccination campaign has started in the United States. The new strain of coronavirus detected in Great Britain worries, it would be 70% more contagious. The global death toll is rising, we have just passed 76 million cases worldwide, with more than 1.692 million deaths. The United States is still the most affected country, with 317,000 deaths and more than 17 million cases. The Dollar fell last week, with the DXY closing lower at 89.924, hitting a 2 1/2 year low. The long-term trend is still bearish. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially over, and the U.S. cotton harvest is also coming to an end. Rainfall in October was above normal, but lower than normal in November. Last week's rainfall was normal. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks at the height of the harvest season were down to 78031 bales from 86544 last week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a basket of foreign currencies closed last week down to 89.924, hitting a 2 1/2 year low. The long-term trend is still bearish. The possibilities of reaching an agreement on a contingency plan to support the U.S. economy, as well as the possibility of an economic recovery, are expected to continue. Disappointing economic results weighed on the currency last week. Indeed, U.S. Retail Sales down to -0.9% and Unemployment Claims up to 885K disappointed. A low dollar is generally favorable for dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures markets is up this week to 81.341 K instead of 67.96 K.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 12/14/2020.Support us by consulting our free magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed higher at $74.08 cents per pound. ICE U.S. cotton stocks were down to 86544 bales. Total cash transactions totaled 6,30082 bales this week compared to 5,31144 bales the previous week, an increase of 9,8938 bales this week compared to 5,0282 bales the previous week and 1,4261 bales at the same time last year. Demand has been good, with China, Pakistan and Vietnam showing interest. Harvesting is complete in most areas, but continues further north, in Oklahoma and Kansas, with an advance of about 80%. According to the latest USDA report, the 2020/21 global cotton production forecast has been revised down to 113903K bales from 116112K previously. The decrease is due to US and Indian production. World cotton consumption estimates have been revised upwards to 115625K bales from 114050K previously. The 2020/21 market will therefore be in deficit, with a drop in stocks to 97520K instead of the 101435K initially forecast. The stocks according to the forecasts will therefore be down but historically high. On the international level, the ECB has increased its asset buyback program by 500 billion, the US support plan has been delayed again and again, and a brexit no-deal is increasingly likely. The FDA in turn is approving the use of Pfizer's vaccine, and vaccination begins this week in the US. In terms of the pandemic update, we have just surpassed 72 million cases worldwide, with more than 1.607 million deaths. The U.S. is still the most affected country, and will approach and surpass the 300,000 mark in deaths and more than 16 million cases. The Dollar consolidated last week as the DXY closed higher at 90.976, with the long-term trend still bearish. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially over, and the U.S. cotton harvest is also coming to an end. Rainfall in October was above normal, but lower than normal in November. Last week, many areas experienced their first significant frost of the season. Wet and cold weather, with slightly above normal rainfall in the delta was reported last week. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks at the height of the harvest season were down to 86544 bales for 101220 last week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a basket of foreign currencies closed last week up at 90.976, although the long-term trend is still bearish. The DXY consolidated last week. The ECB increased its asset repurchase program by $500 billion, and, the U.S. support plan is still lagging behind, still failing to agree on emergency aid of just over $900 billion. The dollar has also strengthened against the pound sterling, on an increasingly likely no-deal, as the disagreements seem so deep. A low dollar is generally favorable to dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures markets is down this week to 67.96 K instead of 70.799 K.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 12/07/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed lower at $71.57 cents per pound. ICE U.S. cotton stocks were down to 101220 bales. Total cash transactions were 531144 bales this week compared to 479062 bales last week, an increase of 52082 bales this week compared to 83328 bales last week and 53680 bales at the same time last year. Demand has been good, with China, Pakistan and Vietnam showing interest. -In the Southeast, a cold bottom passed through the region over the weekend, and many areas experienced their first major frost. Alabama, Florida, Georgia experienced up to 7 centimeters of rain, interrupting work, then resuming where the soils were sufficiently firm. Harvest was 80% complete in Alabama and Georgia, 74% in North Carolina, 77% in South Carolina, and 62% in Virginia, where harvest was late due to wet conditions. -In the Delta, a cold front resulted in lower temperatures and low precipitation in the region during the week. Up to 5 cm of precipitation was reported during this period, with light snow in the northern regions. Field activities were for the most part completed. A few growers reported disappointing yield results and/or grade reductions, which they attributed to wet weather throughout the harvest season, resulting in boll rot in some of the areas. Harvest was 100% complete in Arkansas, 95% in Missouri and Tennessee, 100% in Louisiana and 98% in Mississippi. -In Texas, intermittent rains were reported in parts of southern Texas. Ginning is continuing in the coastal zone. Internationally, last week was marked by the sharp fall of the dollar. The DXY, after breaking through the 92 resistance, is heading towards the 90's, and the Euro was close to $1.22 after disappointing U.S. empoi figures. Hopes for a vaccine, the FED reaffirming that the priority remains to support the economy, and the joint Democratic and Republican proposal for a $908 billion emergency plan are driving equity markets. Curiously, commodities as a whole did not benefit from the dollar's decline. Discussions between the British and the Europeans continue as the December 31 deadline approaches in the hope of reaching a post-brexit trade agreement. Regarding the pandemic update, we have just passed the 67 million cases worldwide, with more than 1.537 million deaths. The United States continues to be the most affected country with more than 282,000 deaths and more than 14.7 million cases. Italy passes the 60,000 death mark, and the United States is facing a spectacular rebound of the epidemic with more than 230,000 cases Saturday, in 24 hours. The United Kingdom, the first country to license Pfizer vaccine, begins vaccination Tuesday. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially over, and the U.S. cotton harvest is also coming to an end. Rainfall in October was above normal, but lower than normal in November. Last week, many areas experienced their first significant frost of the season. Slightly above normal rainfall was reported last week in parts of the southeast, south delta and southeast Texas. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks at the height of the harvest season were down to 101220 bales for 115929 last week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a range of foreign currencies closed last week down to 90.701, and the trend is still bearish. The DXY after breaking the 92 resistance, plunged last week and is on its way to the 90. The Euro rose as high as 1.2175 on Friday after very disappointing U.S. employment figures. As a backdrop, Powell said the priority remains to support the economy, and Democrats and Republicans are working together on a $908 billion emergency support proposal as a first step. For later, once the Joe biden administration is in place, work for a more substantial plan. Forex traders are anticipating an increase in the money supply. A low dollar is generally good for dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures markets is down this week to 70.799 K instead of 73.111 K.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 11/30/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed higher at $73.27 cents per pound. ICE U.S. cotton stocks were down to 115929 bales. Total cash transactions were 47,906,262 bales this week compared to 3,957,734 bales last week, an increase of 8,328 bales this week compared to 5,5843 bales last week and 99,595 bales at the same time last year. Demand has been good, with China, Pakistan, and Turkey showing interest. -In the Southeast last week, conditions were sunny to sometimes cloudy. The harvest accelerated at a good pace as the ideal weather conditions allowed the field work to progress without interruption. Growers continued to report lower yields and reduced quality in areas that received excessive moisture during the fall. In North Carolina, operations progressed more slowly, as fields remained too wet, with harvest 81% complete in Alabama, 73% complete in Georgia, 64% complete in North Carolina, 68% complete in South Carolina, and 49% complete in Virginia, which is below the five-year average. -In the Delta, low rainfall amounts were reported in the North Delta. Operations were ending in good conditions, with the cotton harvest and fall work almost complete. Producers reported that they were generally satisfied with the yields and quality of the crop. Harvest was 99% complete in Arkansas, 91% complete in Missouri and Tennessee, 99% complete in Louisiana and 95% complete in Mississippi. Progress is finally close to the five-year average despite repeated hurricanes. -In Texas, intermittent rains brought light precipitation in some areas. In the east, fields were ploughed and fertilizers were applied. Ginning activities continued in the coastal areas. In the West, more rainfall would have been beneficial, with 90% of the crop being harvested. Internationally, the prospect of Janet Yellen, former FED president, serving as Secretary of the Treasury in Joe Biden's future administration, and hope for a vaccine is fuelling markets. Many countries are preparing vaccination campaigns. Investors are also anticipating a massive stimulus package, with increased government spending that weakens the dollar. The dollar is still low and in a downward trend, the DXY closes at 91.790. While waiting for a vaccine, the pandemic is not weakening. We have just passed 62 million cases worldwide, with more than 1.460 million deaths. The United States is the most affected country with more than 267,000 deaths and more than 13 million cases. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially over, and the U.S. cotton harvest is also coming to an end. Rainfall in October was above normal, but lower than normal in November. Last week, the weather was sunny and slightly cloudy, with rainfall in the South Delta. ICE US CERTIFIED COTTON STOCKS ICE stocks of full-season cotton were down to 1,519,929 bales from 1,183,94 bales the previous week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a range of foreign currencies closed last week down to 91.790, and the trend is still bearish. This is the first close below the 92 resistance level in almost 2 1/2 years. The presumed appointment of Janet Yellen as U.S. Treasury Secretary and Joe Biden's talk of a massive $3 trillion support package weighed on the Dollar. Forex traders are anticipating an increase in the money supply. In addition, U.S. unemployment figures, consumer confidence indexes and inflation figures disappointed last week. A low Dollar is generally favorable to the Dollar-denominated commodities markets.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 11/23/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed sharply higher at $72.96 cents per pound. Hope for a vaccine is fuelling the markets, and Pfizer and Moderna announced very encouraging results. Many countries, such as the United States, Germany, Spain, and others, are already preparing vaccination campaigns. The pandemic continues unabated, with more than 58 million cases worldwide and more than 1.382 million deaths. The United States is the most affected country with more than 256,000 deaths and more than 12 million cases. The hope of a vaccine, as well as the prospects of a massive stimulus package, is driving the markets. The dollar is still low and in a downward trend, the DXY closes at 92.392. Total cash transactions are 395734 bales this week compared to 339891 bales last week, an increase of 55843 bales this week compared to 22630 bales last week and 36236 bales at the same time last year. The weather was particularly dry and sunny last week in the U.S. cotton belt. -In the Southeast, harvesting activities progressed at a good pace. In the lower part of the southeast, there continues to be a loss in yield and quality due to moisture this fall. Harvest is 71% complete in Alabama, 61% complete in Georgia, 59% complete in N and S Carolina, and only 40% complete in Virginia, which is well below the five-year average. -In the Delta, field activities progressed rapidly and under good conditions. Producers reported that yields were slightly below expectations, but were generally satisfied. Harvest was 95% complete in Arkansas, 78% complete in Missouri and Tennessee, 97% complete in Louisiana and 91% complete in Mississippi. Progress is finally close to the five-year average despite repeated hurricanes. -In Texas, ginning activities continued. Ginning is a post-harvest operation that consists of separating the fiber and seeds from the cotton. ICE US cotton inventories increased to 1,18394 bales, above the five-year average. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially underway until November 30, and the U.S. cotton harvest is still underway. Rainfall in October was higher than normal, with more than 200 mm falling in some areas of the Southeast and Delta particularly affected by hurricanes Delta and Zeta. Last week, the weather remained dry and sunny throughout the cotton belt. According to the NHC, a disturbance is underway between Bermuda and the Bahamas and is expected to move northeast with less than a 20% chance of becoming a tropical phenomenon. Rainfall will be expected this week in the Delta from mid-week and also in the Southeast. ICE US CERTIFIED COTTON STOCKS ICE stocks of full-season cotton increased to 1,18394 bales from 9,36331 bales the previous week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a range of foreign currencies closed last week down to 92.392, and the trend is still bearish. Joe Biden, who will be invested on January 20, spoke of a $3 trillion support plan. Forex traders are anticipating an increase in the money supply. Treasury Secretary Steven Mnuchin has called on the FED to return unused funds from emergency aid programs for the coronavirus crisis. The FED has decided to do so, although it considers this decision premature. Last week, this did not cause much movement in the currency market, which remained relatively calm. A low dollar is generally favorable to the dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures markets is down this week to 62.138 K instead of 66.191 K.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market 11/16/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed lower at $68.4 cents per pound. Hopes for a vaccine are fuelling the markets, Moderna announced very encouraging results on Monday. The pandemic continues unabated, we have just surpassed 54 million cases worldwide, with more than 1.320 million deaths. Faced with the second wave, Europe has been confined. The United States is the most affected country with more than 246,000 deaths and more than 11 million cases, and is also taking restrictive measures such as in New Jersey and Michigan. Total cash transactions were 339891 bullets, 22630 more this week compared to 16224 the previous week. Hurricanes Delta and then Zeta have hit the Delta and Southeast region in recent weeks. -In the Southeast, harvesting resumed at a good pace early in the week thanks to dry and sunny weather, before being interrupted again on Thursday by storm Eta which brought strong winds and heavy rains to the coastal areas . The harvest is finished there between 45 and 57% depending on the state. -In the Delta, the harvest progressed rapidly in excellent conditions. No rainfall was reported. Harvesting is 85-95% complete in the South Delta and 63-64% complete in the North Delta, and 89% complete in Arkansas. Growers reported yields were slightly below expectations, but were generally satisfactory. ICE US cotton stocks increased to 9,36331 bales, above the five-year average. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially underway until November 30, and the U.S. cotton harvest is still underway. Rainfall in October was higher than normal, with over 200 mm falling in some areas of the southeast and delta regions particularly hard hit by hurricanes Delta and Zeta. Last week, storm Eta hit Florida, and the southeast experienced heavy rainfall, over 100 mm in some places, while the rest of the cotton belt remained dry. Cotton is particularly sensitive to rainfall at this time of year when the bolls are open. Moisture causes rot and discoloration of the cotton fiber. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks for the full harvest season rose sharply to 93631 bales from 66598 bales yesterday. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 92.755, after a sharp decline in early November. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in on January 20, the Senate remains Republican for now, but a second round will be held on January 5 in Georgia. There is still a lot of uncertainty about the size and date of the famous plan to support the American economy. The Fed has announced that it will increase its "firepower" if necessary. Forex traders therefore anticipate an increase in the money supply. The pandemic is not weakening, Europe has reconfirmed itself in the face of the second wave, the United States is also taking new measures of restrictions in certain states. The hope of a vaccine, with the announcement of Pfizer, calms the markets and prevents for the moment the dollar from playing its role as a safe haven. Caution is still called for, however, as many questions about vaccines remain unanswered. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months. A low dollar is generally favorable to the dollar-denominated raw materials market.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 11/09/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed lower at $68.62 cents per pound. The pandemic continues unabated, we have just surpassed 50 million cases worldwide, with more than 1.250 million deaths. Faced with the 2nd wave, Europe is confining itself or imposing curfews. The United States is the first country to exceed 100,000 new cases in one day. Joe Biden wants to set up a crisis unit. In Europe, many non-essential businesses are closed such as bars and restaurants. Total cash transactions are 317,261 bullets, 16,224 more this week compared to 17,291 the week before. Hurricanes Delta and then Zeta have hit the Delta and Southeast region in recent weeks. -In the Southeast, harvesting has resumed, dry weather has allowed the soil to dry and support heavy equipment. Following the passage of Zeta, some areas were left without electricity at the beginning of the week, and boll rot and reduced quality were observed. The harvest is completed between 25 and 40% depending on the state. -In the Delta, soft soils delayed the harvest. Producers are concerned about the decline in quality and yield. Harvest is 77-91% complete in the South Delta and 52-75% complete in the North Delta, and only 32% complete in Missouri. This week it is the Eta storm that will hit Florida and bring rain to the southeast. ICE U.S. cotton stocks are up to 6,6598 bales, above the five-year average. In the United States, Joe Biden will be sworn in on January 20, 2021. The Senate remains Republican for the time being, but there will be a second round in Georgia on January 5. If the Democrats win both seats, it would bring the distribution to 50-50 seats, and Vice President Kamala Harris could constitutionally break the tie. In the absence of a majority in the Senate, voting on a plan to support the U.S. economy would be made more difficult. This leaves uncertainty as to the timing and amount of the plan. Last week the Fed reaffirmed its willingness to support the US economy and is ready to "increase its firepower" if necessary. The dollar fell sharply, with the DXY dropping from over 94 at the beginning of last week to close Friday at 92.236, a drop that benefited all dollar-denominated commodities. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially underway until November 30, and the U.S. cotton harvest is still underway. Rainfall in October was higher than normal, with over 200 mm falling in some areas of the southeast and delta regions particularly hard hit by hurricanes Delta and Zeta. Last week the American cotton belt was particularly dry. Next week it is storm Eta that will be to watch out for as it will hit Florida and bring heavy rains to the southeast. Cotton is particularly sensitive to rainfall at this time when the boll caps are open. Moisture causes rot and discoloration of the cotton fiber. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks rose sharply to 6,6598 bales from 45,898 bales last week. Stocks are above the five-year average for the same period. THE DOLLAR The DXY index representing the Dollar against a basket of foreign currencies closed last week, down sharply at 92.236. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in January 20, the Senate remains Republican for now, but a second round will be needed in Georgia. Therefore, there is still a lot of uncertainty about the size and date of the famous plan to support the American economy. Last week's statements by the FED certainly weighed heavily on the dollar. The FED announced that it could increase "its firepower" if necessary. Forex traders are therefore anticipating an increase in the money supply. On Sunday, the United States experienced a record covid-19 for the 4th consecutive day, and even though the news was dominated by the elections, the pandemic could be remembered by investors if the US faces a 2nd wave similar to the one hitting Europe. A return of the dollar as a safe haven is not a possibility to be ignored. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months. A low dollar is generally favorable to the dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures markets is down this week to 66.191 K instead of 74.433 K.
ICEUS:CT1!
by Commodity-market-review
Weekly cotton market review 11/02/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website. TECHNICAL ANALYSIS OF COTTON Last week, ICE U.S. cotton futures closed lower at $68.90 cents per pound. The worsening health situation with a sharp increase in covid-19 cases in the U.S. and Europe has strongly impacted markets last week. With the magnitude of the 2nd wave, Europe is reconfirming itself, as is the case in Ireland, Czech Republic, France, Germany, England, Portugal, Austria, and countries such as Spain and Italy, and others are taking increasingly drastic measures, such as curfews, closing bars and restaurants, or limiting people in meetings. The United States is seeing a record number of covid cases in the run-up to the election. Total cash transactions are 301,037 balls this season compared to 215,015 last season at the same time. After Hurricane Delta, it was Zeta's turn last week to dump heavy rainfall in the Delta and the Southeast. Zeta caused extensive damage to trees, power lines and buildings. The national weather service reported that more than 2.5 million people were without power in the storm's path. The storm brought rainfall of 5 to 10 centimeters in Louisiana, Mississippi, Alabama, and Georgia. The National Weather Service issued river flood warnings. Harvesting operations, which had begun to expand, were again at a standstill due to bad weather in some areas. ICE US cotton stocks rose to 45,898 bales, above the five-year average. In the United States, the US election is scheduled for tomorrow, November 3, and market tensions cannot be ruled out. Investors fear the possibility that Donald Trump will be declared a narrow loser and do not want to recognize the results, making the transition more complicated and delaying the vote on the long-awaited plan to support the US economy. WEATHER IN THE UNITED STATES The hurricane season in the North Atlantic is officially underway until November 30, and the U.S. cotton harvest is still underway. After Hurricane Delta, it was Zeta's turn last week to dump heavy rainfall in the Delta and the Southeast. Zeta caused extensive damage to trees, power lines and buildings. The national weather service reported that more than 2.5 million people were without power in the storm's path. The storm brought rainfall of 5 to 10 centimeters in Louisiana, Mississippi, Alabama, and Georgia. The National Weather Service issued river flood warnings. Cotton is particularly sensitive to rainfall at this time of year when the bolls are open. Moisture causes rotting and staining of the cotton fiber. ICE US CERTIFIED COTTON STOCKS ICE cotton stocks rose to 45,898 bales from 3,371 last week. Stocks are back above the five-year average over the same period. THE DOLLAR The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 93.882. The 2nd epidemic wave is scaring the market and the Dollar seems to be playing its role as a safe-haven currency. The chances of a quick agreement on a plan to support the U.S. economy are now nil. We will have to wait now for the election result, and this is beneficial to the Dollar in the short term. On the FED side, things will certainly remain frozen until the outcome of the American election. The FED has insisted on the need for a quick vote of a support plan, and they assure that the key rates will remain permanently low. A low dollar is generally favorable for dollar-denominated commodity markets. COMMITMENTS OF TRADERS The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators). The net positions of speculators on the futures markets are particularly interesting to observe. The speculative net position on the cotton futures market is up this week to 74.433 K instead of 71.176 K.
ICEUS:CT1!
by Commodity-market-review