China’s inclination to buy US upland cotton has led to modest increase in the NYCE cotton futures due to fund buying last week. Close attention is being paid to any move by China to step up cotton purchases in the market. As of the last USDA weekly export sales data, China has bought 4.09 million RBs of US upland cotton in the 2003-04 marketing year (August/July), against purchases of 1.02 million RBs at this time last year.
Cotton futures would be lean and direction less as the market braces for the release of the monthly USDA supply-demand report to be released soon. The weekly USDA export sales report came in quite positive for futures, which was better than the
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USDA said US cotton shipments hit 318,000 running bales (RBs, 500-lbs each), versus trade belief that it would range from 200,000-250,000 RBs. The US cotton industry has to export more than 300,000 RBs in the remaining weeks of the 2003-04 marketing year (August-July) to reach the USDA projection of U.S. cotton exports reaching 13.2 million (480-lb) bales. US net upland cotton sales stood at 148,100 RBs.
The active May contract tested the resistance levels and retraced from there sharply. The neckline point at 66.35c will be a good support level now. As mentioned last week, a double bottom pattern was seen with the fractal tops at 76c as an important resistance level. Prices retraced even before reaching there. 
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