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(March 14, 2002) COTTON: Cotton prices have been able to move slowly higher with little news to generate a significant amount of interest in either direction. Technically, short-term trends have remained higher for about the last three weeks. A close back below the 37 cent level basis the May contract would turn short-term trends down. Long-term indicators are making an attempt to turn back higher which should be seen as a good sign for producers. A weekly close above $39.10 should be enough to turn long term trends back up and another shot at making that 5-cent move back into long term target ranges. A move of this magnitude would place the December cotton back up towards the 48 cent level which would be a good level to price this year's crop with put options. Traders are still waiting to see some form of a Farm Bill to determine whether or not farmers are going to swap acres are hold unchanged from last year. Some analysts are estimating this year's production to come in over 18 million bales with an increasing ending stocks. Larger ending stocks would not bode all that well for prices again this year. The possibility that put options could add to another large LDP would look more favorable than seeing prices back up into the 60 cent range depending on a producers cash basis. Either way, prices need to move higher to provide a hedging opportunity or the producer will have to go another round of depending on the government for support.

SHORT-TERM TREND--Trends are higher.

LONG-TERM TREND--Trends may be turning up again.

Bryon Fillpot

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