There were 127 Cotton Notices issued this morning bring the total to date 2,934. Issuers were JP Morgan-31, and Term-96. Stoppers were Citigroup-4, and Newedge-123.

May’08 open interest this morning before the notices was 508 contracts, down 1,029. July’08 open interest was 125,497 contracts, up 378. Dec’08 open interest was 101,285 contracts, up 373. Total open interest was 247,979 contracts, up 174. Certificated stocks total 1,278,510 bales, up 29,623 bales from the previous report. There were 136,408 bales awaiting review. The 2007/08 North European A-Index was up 65 points at 75.45 and the B-Index remains unquoted. The Far Eastern A-Index was up 85 points at 73.75.

Just before the option pit opened at 8:15AM July had been trading in a very tight 36 point range between 70.61 and 70.25. July had opened at 70.36. July then came under some good selling pressure which pushed July down to a new low of 69.37(-99) which was reached around 8:18AM. July was then able to climb back up to 69.90 over the next twenty minutes. July stalled at this level and then drifted back down to around 69.60. In Chicago, the early morning grain session ended with Soybeans up 3 ½ cents, Corn up 3 ½ cents and Wheat up ½ cent. The Dollar was trading fairly strong this morning, up about 55 points per the Dollar Index. Crude Oil was only trading up about 22 cents on the day, and Gold was down about $10.00. July returned to a slow sideways trading pattern, moving mostly between 69.60 and 69.75. Putting a floor under July was fairly large bids of around 360 Julys between 69.50 and 69.40. At 10:30AM, July was trading around 69.70. Trading then picked up when the selling intensified which pushed July down into the earlier support at 69.50 of which most was taken out. July stalled at this level for about only a few minutes. However, July then only inched down to 69.47. July’s downward momentum again stalled at this lever and July was able to make slow but steady recovered up to 69.87. Some of the earlier pressures seem to come from some bearish option actives. Our recovery may have come from the strength in Chicago grains where Soybeans were trading 15 to 21 cents higher and Corn 6 to 9 cents higher. Little after 12:15PM the buying again picked up and moved July up and over 70.00 and continued to rally July up to 70.55. July trading turned sideways at this higher level, moving mostly between 70.45 and 70.20. During the one minute settlement period, July chopped mostly between 70.31 and 70.40. After this period, July traded on up to 70.49. July’s last tick of the session was at 70.40. At about the same time in Chicago, Soybeans were trading 31 to 33 cents higher. Also, you can’t keep Crude Oil down which had traded from a -$1.09 up to +$1.91 ($123.75). The higher energy prices were hammering the DOW which was down over 160 points. Say good bye to May’08 contract which went off the screen today at 249 points under July, settling at 67.88(-23). July closed well off its low, settling at 70.37(+1). Dec was settled at 78.87(-2). The July/Dec straddle was only moderately active today, trading about 1,320 time, ranging from 901 to 840 points. Most of the straddles were done in about a 10 point range between 840 and 850 points. Estimated volume today was 9,000 contracts. Previous day’s volume was 16,714 contracts. Tomorrow morning at 8:30 EDT the USDA will release its Weekly Cotton Export Report. On Friday, May 9th, the USDA will release its Monthly US and World Supply/Demand Report. For the first time this report will also give a rough estimate or outlook for the coming 2008/09 cotton season.
 

Daily Moving Averages:	July	Dec
3 Day Average	70.01	78.42
7 Day Average	70.09	78.45
21 Day Average	73.54	81.67
40 Day Average	75.01	82.24
50 Day Average	76.91	83.55
100 Day Average	74.60	80.17
RSI:	37.7	40.6