Cotton futures jumped to 51.70 early in the trade Wednesday, where it had met resistance and finally rested below the 100 day moving average. Cotton finished at 51.07 and that was down .28 on the session. That was the second round of profit taking and we could see more follow through as the week raps up. You should still look at buying dips in the cotton and having an upside objective around 55 to 57 cents. Trade was expecting low numbers for exports compared to last week. That might see an early sell off and hit support below the market at 50.90 and 49.70.
Trade Recommendation(s):
(Cotton) Buy March Cotton at 49.80, Risk 47.80, objective 55.80
(Cocoa) Buy March Cocoa at 2553, Risk to 2450, objective 2855
Working Trade(s):
None
Technical Commentary: (Cotton) Technical support comes in at 50.90 and 49.70 were resistance Thursday will be at 51.82 (100 day MA) and 52.40 (Weekly highs). We are still in an uptrend right now and looking to reposition our selves at a lower level. There are sources estimating we can see a high in February around the 59 cent due to the expectation of lower planted acres.
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