Cotton Vs. Grains

Discussion in 'Commodity Futures' started by runningman, Sep 15, 2007.

  1. Can farmers plant cotton on the same land as wheat and corn? My thinking is that many will forsake cotton for grains since their prices are so high and we will see a supply shortage of cotton. Next question is, if I want to play this view, what part of the cotton strip should I buy? The further out months don't look very liquid.
  2. jreadling


    My understanding is that cotton acres can be converted to acres where wheat is followed by a late planting of soybeans. These crops are less labor intensive as well.

    I believe that the Dec contract represents the harvest result. Therefore I would look at CTZ8 as the contract to take advantage of this acreage shift.
  3. Thanks- what do you think of that idea? Cotton could move to the low 70s I think if beans and wheat keep going up.
  4. jreadling


    I think it is likely that cotton would benefit from an acreage shift. If the timing of the trade doesn't bother you, then it would be reasonable to consider going long CTZ8 with a target of 76.