The old axiom, “small crops get smaller,” is an important one for this market. What I meanby that is this. The US cotton crop is the smallest I can remember in my carreer, and I’ve been around 30 year……I know that’s why I’m a seasoned professional….Anyway, almost 60% of this year’s crop is focused in Texas and you can’t expect that all to grow. In fact if you look at the progress report from the other day 72% of the Texas cotton crop is fair or lower.

Sure demand will suffer from Z over 60 cents, but tell that to the funds! They see an opportunity and are juming on it. Recall that prior to the “bearish” planting report prices had already advanced. then they dipped in choppy trading, yet still closed up on the day. Its not so much supply and demand for the underlying cotton as it is supply and demand for the futures contracts…..Cotton may be ready to make a good sized move higher. Buy dips.  Looking anything like Sugar ?

mi/

This entry was posted on Wednesday, July 1st, 2009 at 9:00 pm and is filed under Softs. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.