Cotton Futures—Cotton futures in the July contract opened sharply lower this Monday in New York as a trade agreement with China looks to be on hold sending prices down to 220 points at 73.48 hitting a fresh 9 week low.
I have been recommending a bearish position from around the 75.78 level and if you took that trade continue to place the stop loss above the 2 week high as an exit strategy which now stands at 78.48 as the chart structure will start to improve on a daily basis therefor the monetary risk will also be reduced.
Cotton prices are trading below their 20 and 100 day moving average & as I’ve talked about in many previous blogs as I think we will test the February 12th contract low of 72.33 as the agricultural markets and especially the grain market continue to melt on a weekly basis and I don’t see this situation changing unless some type of Chinese trade agreement happens.
Growing conditions in the southern part of the United States are ideal at this time as planting is in full swing as the summer months are around the bend as the volatility certainly will increase as weather will be the main influence on prices, but in the short term stay short as there’s further room to run to the downside as prices still look expensive.
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