May 29 2013
The weakness in cotton continues and the December contract is now perilously close to key support on the December chart as shown here:
If December futures close below key support at 83, I strongly suspect we’ll test a full Fibonacci retracement of 62% of the bull move from 79 to 89 beween January and March. That would take December to 82.60.
At that point, if it holds, I may advise lightening up on hedge protection. Yesterday NASS issued planting progress and 59% of the crop is planted, down 10 pts. from the 5-yr average, but closing the gap. Last week only 39% was planted and 13 pts. below the 5-year average. NO CHANGE IN ADVICE. (Source: Agfax.com)