cotton?

Discussion in 'Ag Futures' started by Susannah, Nov 11, 2008.

  1. Anyone here trade cotton? It's price is back to where it was in 2002 (and looking at even further back than that, I can't find a much cheaper price). How much downside is left in it? Thinking about putting on a longer-term trade.
     
  2. Back month is more expensive than front month - wait until it reaches 30 (if it holds)

    Con. Month Last Change Open High Low Previous Time (CT)
    ChartOptionsCT Jul 08 73.59 -0.12 73.59 73.59 73.59 96.70 7/15/2008 1:38:31 PM
    ChartOptionsCT Dec 08 39.57 -1.67 41.24 41.36 38.45 41.24 11/11/2008 3:14:39 PM
    ChartOptionsCT Mar 09 42.39 -2.37 44.65 44.70 41.80 44.76 11/11/2008 3:14:46 PM
    ChartOptionsCT May 09 43.54 -2.79 46.12 46.12 43.45 46.33 11/11/2008 2:36:33 PM
    ChartOptionsCT Jul 09 45.09 -2.81 47.79 47.79 44.90 47.90 11/11/2008 2:36:33 PM
    ChartOptionsCT Oct 09 47.69 -2.87 47.69 47.69 47.69 50.56 11/11/2008 2:36:33 PM
    ChartOptionsCT Dec 09 49.60 -2.75 52.26 52.26 49.35 52.35 11/11/2008 3:13:00 PM
    ChartOptionsCT Mar 10 52.90 -3.00 52.90 52.90 52.90 55.90 11/11/2008 2:36:33 PM
    ChartOptionsCT May 10 53.90 -3.00 53.90 53.90 53.90 56.90 11/11/2008 2:36:33 PM
    ChartOptionsCT Jul 10 55.40 -3.00 55.40 55.40 55.40 58.40 11/11/2008 2:36:33 PM
    ChartOptionsCT Oct 10 56.90 -3.00 56.90 56.90 56.90 59.90 11/11/2008 2:36:33 PM
    ChartOptionsCT Dec 10 58.15 -2.85 61.11 61.11 58.00 61.00 11/11/2008 2:36:33 PM
    ChartOptionsCT Mar 11 61.89 -2.51 61.89 61.89 61.89 64.40 11/11/2008 2:47:12 PM
    ChartOptionsCT May 11 62.65 -2.75 62.65 62.65 62.65 65.40 11/11/2008 2:36:33 PM
    ChartOptionsCT Jul 11 63.65 -2.75 63.65 63.65 63.65 66.40 11/11/2008 2:36:33 PM
    ChartOptionsCT Oct 11 64.65 -1.75 64.65 64.65 64.65 66.40 11/11/2008 2:36:33 PM
     
  3. <a href="http://s252.photobucket.com/albums/hh9/splash68696/?action=view&current=CT.png" target="_blank"><img src="http://i252.photobucket.com/albums/hh9/splash68696/CT.png" border="0" alt="Photobucket"></a>
     
  4. Compulsive, yeah, I was thinking of just rolling the position, although there would be some loss with that I know.

    You're right, no need to catch a falling knife, I should wait to 30 or at least until I see it bouncing some.

    There's also an ETF on the English exchange I was going to see if I have access to buy through IB.
     
  5. consider doing a spread?
     
  6. A spread is probably a good idea. I definitely need to research the prices of the options. Just trying to get a feel for the prices right now. I've only dabbled in the ag futures before and it was years ago, but scanning through the charts, cotton just seems to be cheap.
     
  7. Just be careful, what is cheap to you is overpriced to others - wish you the best
     
  8. On the chart, it seems that from 90-80 the short-term speculators drove it up, nothing but air supported it and they had to get out before they got a deliverable.

    Then, you had long-term speculators still in it, long-term they can only support a price twice as high as the people who are buying the contract for delivery support all by themselves (since they will have to sell it to someone wanting a deliverable before expiration of the contract - long-term speculators can't support a price more than twice what it would be without them there seems to me). So, that puts us at 1/2 of 80, which is 40, which is where it's sitting.

    There's of course, supply-side glut of supply that can interfere, but I figure long-term that takes care of itself, since farmers plant less of it when it's cheap.

    Then, there's demand destruction, and that's the real question mark right now isn't it.

    Please critique this analysis. I want to learn.
     
  9. cotton fundamentals still very bearish....I'm looking at spreading...but spreading March/Dec 09. leave it for a few weeks, then exit, then maybe....MAYBE dabble long...