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(March 6, 2002) COTTON: Volatility has slowed down in the cotton pit since prices broke long-term support levels below the 36 cent level basis the May contract. There are several things which do look positive from the technical perspective. First the market was able to pull back about 2/3rds and hold just above the 35 cent level. Second, prices have turned short-term trends back higher which has held this short rally together. Short-term resistance lies just above at last week's high of $36.75 basis the May contact. A close below $35.50 would turn short-term trends back down. Daily charts are basically "oversold" which could also signal more move to the upside. Long-term trends have all turned down, but with the seasonal tendency to move higher into the spring, prices may have another shot back up before turning lower into the summer. There will also be several other factors which may influence prices. The new Farm Bill may force many cotton acres back into grain production, but only time will tell. We would expect to see something out of Washington over the near term which outlines a new bill.

SHORT-TERM TREND--Trends are higher.

LONG-TERM TREND--Trends are turning down (may see another rally).

 

Bryon Fillpot

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