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505-769-3300(March 30, 2000) COTTON: Cotton have continued lower since widespread rains have improved the possibility of plantings. It's still too early to become overconfident in many cotton growing areas, but more widespread rain has been forecast in the coming week. Support levels around the $60.00 area is expected to hold this current correction basis the December cotton. This is also about a one-third correction from the December low to the March high. Improved conditions will remain a factor, but overall, the market should be in position to rally back to at least re-test the most recent highs sometime during late spring. The size of the U.S. crop will always play a role in prices, but let's not get tunnel vision on what's going on only in the U.S. Last year's crop was terrible as well as the weather and prices fell straight through the floor. If this year's crop is better and weather is more favorable, don't always expect the market to do what would be normal. We're not say ignore the facts, but focus on the price. The market will generally be trending in one direction or the other and prices will run in either direction until they reach a point at which time they stop. Until the market changes direction or can confirm what the fundamentals are telling us, then don't do too much anticipating. There are several strategies out there which can allow the producer to take advantage of prices while leaving the back door open (just in case). Short-term trends are down, but long term trends are still up.
SHORT-TERM TRENDS--Down
LONG-TERM TRENDS--Weekly charts are toppy.
Bryon Fillpot
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