Cotton Prices Slightly Lower

Cotton Futures---Cotton futures in the July contract are down 10 points to start off the week at 65.90 as prices still look to test the contract low which was hit on May 14th at 64.50 in my opinion.

Traders are awaiting this afternoons crop progress report as that certainly will send some volatility back into this market as the grain market has rallied significantly, but has had no impact on cotton prices.

I have been recommending a bearish position from around the 75.74 level and if you took that trade continue to place the stop loss above the 10 day high which now stands at 73.69, however that will be lowered on a daily basis therefor the monetary risk will also be reduced.

The trade war between the United States and China looks to be escalating as that is negative towards prices as China is the number one importer of U.S cotton in the world as I think prices will continue to drip lower until some type of agreement has been made.

Cotton futures are still trading far below their 20 and 100 day moving average as the trend is to the downside and if the contract is broken prices could test the 60 level in the coming weeks ahead especially if ideal weather conditions remain in the southern part of the United States so stay short.

TREND: ---LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: LOW

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