June 1, 2021
Cotton resuming its bullish explosion
After some big swings up and down since February…but essentially going nowhere…I think Cotton has taken on an EXTREMELY BULLISH look and is now poised to move another 30-40 cents on the upside.
As I noted all the way up last year, until exiting temporarily in February, when Cotton is ready to top out, pretty much every analyst, farmer and broker in the Cotton world will be screaming, “BUY IT!” And from everything I can hear and read today, with this market now looking ready to make new highs, EVERY analyst I have seen, all of whom NEVER recommended getting long last year, is talking nothing but “sideways between 80-86,” and, “Don’t miss your chance to be locking in prices here,” with NONE of them (that I am aware of) even remotely suggesting that this is a bull market that still has a LONG way to go.
Yes, Cotton has had a decent bull move but it has done relatively little compared to the moves we have seen in so many other markets…but I think Cotton’s turn at making commodity headlines is now coming. The USA and World Economies ARE expanding…and personal consumption is going through the roof (the department stores are PACKED)…and I think Cotton demand is/will be going right along with it. BIGTIME.
And on a supply side note, whether it’s here, or anywhere else in the world, with prices where they are for Corn and Soybeans, I am quite certain that some potentially significant percentage of farmers are switching acreage out of Cotton to both of those crops…and maybe in a big way.
BUY COTTON NOW. I THINK THE NEXT LEG UP IS NOW STARTING.
The Longer Term…
My recommendation at current levels…
Or…You can buy futures and use a 3-4 cent stop…
Back on track…
Give me a call if you think this makes sense and you want to do something with it…
All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Cotton