Monday, March 03, 2008

Agora's Kevin Kerr Still Loves Cotton

From Agora's 5 Min Forecast:

“The cotton market has been very depressed the last few years due to high carryover stocks and lower global demand. All that may be changing. Farmers in key cotton-growing states are rejecting the idea of continuing to grow cotton and are opting for more profitable crops that have lower input costs.

“We are already seeing buying interest come back into the cotton, but it is still underperforming the other highflying grains. I would look at buying either call options or futures on the December 2008 cotton (CTZ8).”

4 comments:

pharmer said...

Why I love rice right now - In today's CME Group newsletter there was a report that Vietnamese rice prices were way up on thin supply and high demand. The government is asking they halt exports at this time due to no rice to export. There is another article from rice guru Milo talking about China acting the same way. Their supplies are too thin to export and therefore are not spotting any export prices at the time being. I think this pullback is a great rice entry.

Just thought I'd share some insight with the group, or if someone has something contrary to what I have, PLEASE tell me, the only thing I hate more than being wrong is losing money!

Your local Pharmer-

Jay Rao said...

I am interested in opening a futures account. Can you please share where you have opened your account?

pharmer said...

Sure thing. Actually this is not my blog, but it belongs to SugarHigh. I enjoy reading it because he is very academic with his trading (like myself) and I enjoy comparing trading notes with him. I encourage you to keep reading his page. I'm sure he would be happy to let you know where he trades (you can also find it on an earlier post a month or so ago he gave that information out).

As for myself, I use OptionsXpress. I like their charts, low cost trades, and no delay in fills. I've had 4 brokers to date and they're my favorite.

Your local Pharmer-

SugarHigh said...

Hey Pharmer -

The only contrary fear I have right now is that the grains may be due for a short term tumble if funds quickly pull some money out. Toby's of the opinion that those guys were running up prices up to month's end, and now that the month has closed, they may be pulling money out of the market.

Unfortunately I don't have a crystal ball - I agree fundamentals look great on rice, and the market could certainly run away. I guess the question is, do you wait until a new high to confirm the bull is still running, or do you enter on this pullback and hope it's just a blip on the radar.

Jay - thanks for stopping by. I personally use Farr Financial (www.gofutures.com) for my trading here. They have a cheesy interface but it's pretty easy to use and I've been relatively happy with them.

Some other guys use Interactive Brokers. I actually use them for my IRA. They have a great selection you can trade, but their interface sucks. There are tools that plug on top of their interface...though they might be a tough one for a beginner opening his first account.

Brett

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