Cotton Prices Look Very Weak


Cotton Futures— Cotton futures in the May contract settled last Friday in New York at 59.54 while currently trading 57.34 down around 200 points for the trading week as I’ve been recommending a short position over the last several months and if you took that trade place your stop loss above the 10 day high which has been lowered to 60.40 as the chart structure has improved dramatically. Prices are trading below their 20 and 100 telling you that the trend is to the downside as the chart structure will start to improve in the next 4 days as prices traded lower 4 out of the last 5 trading sessions.

The problem with the cotton market as well as much of the grain market is that we have large supplies and less demand as China is not importing as much as they used to as China holds the largest reserves in the world as it seems to me that we need some type of weather disaster here in the United States to push prices higher or I think prices could trade as low as 50.00 in the coming weeks.

Cotton planting has started in certain sections of the state of Texas as planting is upon us as we are entering the month of March as we are expected to grow 9% more than in 2015 which is also another very bearish indicator as this trend is getting stronger on a weekly basis in my opinion, so continue to place the proper stop loss always risking 2% of your account balance on any given trade.