Cotton Grudgingly Higher, Following Gains in Grains
On Tuesday cotton responded by holding early efforts at backing off, as speculators and funds once again added longs. Ample scale up trade selling was seen, but tempered by option activity that suggests a healthy respect for additional potential strength. In fact option volatility was firmed by net buy side strategies.
With higher lows now becoming a regular pattern cotton prices continue to attract longs on any price dip. However, cotton prices are also reacting to outside influences rather than their own fundamentals, which are not stellar. Strength in grain prices does equate to substantially lower plantings, but that should be a play more for the future, (don’t forget we trade cotton futures) and that should reflect itself most undeniably in next year’s crop prices, yet, March remains the most actively traded contract and it too continues to advance, albeit hesitantly.
If grain prices get hit with a wave of profit taking cotton prices should follow, so longs might consider using a tight stop. Short term aggressive traders know this and are waiting for such an opportunity to take advantage from a bout of selling.
Support: 6665-6650, 6625-6610, 6550-6530, 6500-6490, 6440-6425,
Resistance: 6735-6780
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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