Cotton Futures—Cotton futures in the December contract is currently trading higher for the 3rd consecutive session up sharply this Wednesday afternoon in New York currently trading at 62.20 up 132 points or 2.50% right near a 4 month high.
I am now recommending a bullish position while placing the stop-loss under the June 23rd low of 58.55 as the risk would be around $1,700 per contract plus slippage and commission as a breakout to the upside has occurred in my opinion. Yesterday’s crop report stated that the United States only planted 12.19 million acres as estimates were 13.15 as we should not produce a record crop in 2020 as the fundamental and technical picture for this commodity has turned to the upside coupled with the fact that demand is coming back from China.
Cotton prices are trading above their 20 & 100 day moving average as this trend has finally returned to the upside as the risk/reward is in your favor, however the chart structure will not improve for another 6 trading sessions so you will have to accept the monetary risk at this time.
CHART STRUCTURE: SOLID
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