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(March 26, 2002) COTTON: According to the International Cotton Advisory Committee, "Low cotton prices will reduce the supply of cotton next season." Well alright then. They went on to say that the world cotton industry is in the worst shape since the invention of the cotton gin about 200 years ago. They suspect all this pain and angst will lead to a 10% cut in production worldwide. Which brings us to Thursday morning's USDA report. Cotton plantings are expected to come in at about 14.547 million acres, with a range of guesses from 14.80-14.17. Last year we planted 15.80 million acres and harvested 20.08 million 480 lb. bales.

All that friendly talk aside, the cotton chart is pretty menacing right now. Cotton traders should use caution, and regardless of what the report says trade market action.

Traders are beginning to view the cash market with a bit more optimism. Exports have been stronger in the recent past, a trend that cash brokers expect to continue. While the chart is on the defensive for now, the worst may be over. Cotton bulls might begin to take a look at cotton as a buy on pullbacks.

M. Steven Morgan

www.commodityreview.com

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