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NY cotton futures on backfoot
29 May '09
4 min read
So where do we go from here? Both the fundamental and technical picture seem to indicate that the market has more room to the downside. As always, speculators take a back seat when we head into the notice period because they typically don't get involved with the certified stock. This leaves the trade to sort out at what spread or at what outright level the stock deserves ownership. The market will most likely trade into the 50-53 cents window as July winds down and we anticipate that it will find decent support in that area.
Once July has handed over the spot month designation to December in about three weeks from now, it remains to be seen whether December can sustain itself at a premium. However, even if December were to sell off initially, we don't believe that it would be long lasting, because cotton in the low 50's doesn't make any sense in the long run. We believe that for those who are patient there will be an excellent buying opportunity over the next four to six week.
Once July has handed over the spot month designation to December in about three weeks from now, it remains to be seen whether December can sustain itself at a premium. However, even if December were to sell off initially, we don't believe that it would be long lasting, because cotton in the low 50's doesn't make any sense in the long run. We believe that for those who are patient there will be an excellent buying opportunity over the next four to six week.
Plexus Cotton Limited
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