We ran the weekly chart shown here and can report that the old crop months bounced right off that uptrend line to close with triple digit gains yesterday, but then gave much of it back today and are again testing the same uptrend line. No change in advice. Old crop futures are thinly traded and prone to major moves up or down on one or two large buy or sell orders and those who know the players and their next moves are playing cat and mouse in old crop.
New crop is more driven by fundamentals and it’s still somewhat bullish for the U.S. outlook but bearish globally due to the radical change in China’s domestic cotton policy which will likely sustain more production than global prices would warrant while at the same time reducing huge reserves to discourage imports.
