Cotton has been in a range for a long time. Currently, we see a reversal. The drought in the USA and Asia has significantly influenced the supply side, which is noticeable in the price. Also, seasonally, an upward trend is expected. However, the COT data from the COT report do not confirm the buy signal. Nevertheless, I still anticipate an upward trend if the fundamental situation in the market fully prevails
Max Schulz
Mixed Picture for Cotton
Global Weather Issues:
Poor weather in countries like India, the USA, and China indicates rising prices in the cotton market. 🌧️🌪️
Seasonal Trends:
It’s the season! Seasonal trends suggest that cotton prices tend to rise at this time of year. 📈🗓️
Stronger Dollar & Economic Concerns:
Despite the strength of the dollar and economic uncertainties, especially regarding China, there is a cautiously optimistic sentiment in the market. 💵🌐
Oil Prices:
The robust oil prices and global weather issues also support cotton prices, despite the slowdown in the Chinese economy. 🛢️🇨🇳
COT Data:
They do not provide a buy signal yet, as the commercials are net short and the COT Index is in the selling area.
My Forecast:
The fundamental data present a mixed picture. The technical analysis indicates an ascending trend. A weaker dollar could be the trigger for rising prices. I believe we will see good trading opportunities here in the coming weeks.
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