Thursday, August 30, 2007

Big Day for Cotton

Check out this chart - thank you Toby for the link:

I don't know much about technical analysis - anybody out there know what to make of this?


Toby said...

I was just reading about how Cotton's rise is partially due to the jump in price of Soybeans but especially Wheat. Makes sense, more acreage for Wheat means less for Cotton. Though Wheat has been going straight up during the entire time that Cotton has been going down. Not disrespect to fundamentals but, for me, this is a great example of why I don't pay too much attention to them.

SugarHigh said...

Hey Toby - good point, here's my take on it. I believe farmers primarily adjust their planting ratios at the beginning of each growing season (springtime).

So next growing season, more farmers will plant wheat, taking away acreage from cotton - bullish for cotton prices in '08.

However in terms of this year? I'm with you - don't understand how this affects the current cotton contract. All this stuff is already in the ground approaching harvest.

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