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505-769-3300March 16, 2000) COTTON: Cotton prices have remained strong along side the CotA Index. World prices have remained strong and this has become the focus supporting higher cotton prices. Weather patterns across much of the southern Plains and southeastern U.S. have been trying to change the long standing dry weather, but up until now, there hasn't been enough rain fall to benefit much of this area. Planting estimates are that roughly 15 million acres of cotton will go into the ground this spring. This could become a concern as we get further into the growing season, but much of this will be weather based? China is still saying they'll implement changes to reduce their overall cotton production by as much as 1.4 million bales this year? This is another factor which will influence prices this year, but mostly a "wait and see" attitude exists at this time. A close below $63.00 basis the July cotton would turn trends down from here. We've been looking for about a four- to five-cent drop in prices over the short term and then a recovery into planting. So far, the market has held up much better than many analysts had been predicting? The chart pattern we're seeing now is a wide channel with prices drifting higher? Without any strength coming from new buying as prices make new highs, makes this market look toppy? There are some projections around the $64-$65 area if we could see a convincing break-out to new highs, but technically, prices are very overbought at current levels. We're can see the potential for higher prices, but we want to remain cautious at this time. We're close the $65 price target in December cotton.
SHORT-TERM TRENDS--Toppy.
LONG-TERM TRENDS--Weekly charts are toppy?
Bryon Fillpot
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