Cotton prices were lower today after posting five year highs on Tuesday Cotton prices were lower today after posting five year highs on Tuesday
As we all know cotton has been following the lead in grains in lieu of its own (bearish) fundamentals, so when wheat broke down lower this morning cotton tagged along. Speaking of wheat, I cannot believe the range and volatility of what happened there today. The price of wheat seesawed from the biggest gain ever to the largest decline and then back again. How risk in a market that does that can be managed is beyond my capabilities. At any rate, May cotton settled 7793, and July 79.73 both down 1.55, while the December contract was 1.53 lower closing at 83.50 cents.
Obvious profit taking kicked in and after the rally we’ve seen, that’s to be expected. I suspect we will now see either more of the same, (depending upon the potential for the ever present influence from grain markets), or a few days of consolidation work as a new base gets formed.
I remain bullish on the long term for cotton and still advise owning upside calls especially in Dec and maybe July. Yet, prudence and common sense also suggests that a little catastrophe insurance (owning cheap puts in May) might not be a bad idea, (look what happened today in wheat).
Si quiere más información, por favor contáctenos,
Maria Aranda
El equipo de Brokers de Futuros USA
Email: [email protected]
TEL: 312-261-7395
Fuente: MF Global
©2007 Jurgens Bauer & Associates all rights reserved.
Jurgens Bauer
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