Cotton Futures Breakout
Thursday, November 30, 2006
by Donna Heidkamp of RJO Futures
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Momentum may
be changing in the cotton futures market. Although the consumption
report came out bearish this morning, the market moved higher and
closed above the down trending channel going back to
July.
The weekly
export numbers were extremely strong this morning which gave the
market the much needed boost. The market was expecting exports to
be 100,000 - 250,000 round bales. It surprising came out at 501,000
round bales. This increase can be attributed to the weakness of the
dollar. Besides the strong weekly export number, the market is
starting to anticipate a significant decline in cotton acreage next
year as a result of the trickle down acreage demand for
corn.
The market was
active today as a result of fund and speculative short covering and
renewed interest on the long side.
Recommendation: Buy March
Cotton on a close above 5315 today. Conservative players should
risk the trade to 5225 stop. ($400) More aggressive
players
Chart Copyright 2006, CQG, Inc.
Support: 5320; 5240; 5209 -- Resistance: 5455; 5529
Recent articles from this author
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- Growth and Inflation Battle Continues - Friday, February 29, 2008
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- Jobs Growth a Primary Concern - Friday, January 18, 2008
About the author
My interest in the futures industry stems from strong family ties to production agriculture in Hereford, Texas. After completing a bachelor's degree in Agricultural Economics at Texas Tech University in 1995, I moved to Chicago to participate in the Chicago Mercantile Exchange Agricultural Broker Training Program. The program exposed me to all facets of the futures industry, enabling me to work with experienced floor traders and develop a strong understanding of the intricacies of trading in the futures markets.
Since completing the training program in 1995, I have continued to gain a well-rounded knowledge of the industry by working as an order clerk, trading desk manager, and broker for RJO Futures. In 2004, I started a branch office of RJO Futures to focus my efforts on helping clients meet their trading goals. By identifying client objectives, managing risk, and providing a carefully tailored service, I serve as a dedicated liaison on all trading floors to full-service, broker assist, and on-line clients. My commentary can also be heard regularly on CNBC TV and Bloomberg.
In order to continue to better serve my customers in an ever-evolving and dynamic industry, I also completed a M.S. degree in Financial Markets and Trading from the Illinois Institute of Technology in May of 1999.
RJO Futures is the retail division of R.J. O'Brien, one of the oldest FCMs tracing its history back to 1914.
To learn more about RJO Futures, visit rjofutures.com
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