Petricca’s Pick 10/27/2023

BUY MARCH COTTON

 

Cotton futures are in fact within my lower 25% parameter where Long-Term accumulation is recommended. Today March cotton futures are trading $86.66. Spot December is $85.22.

 

 

While cotton futures are relatively cheap here in 2023 the basic supply/demand fundamentals are extremely bullish.

 

This year cotton production will be at historical lows due to drought in the cotton belt.

 

USDA’s September Crop Production report forecasts 2023/2024 U.S. cotton production at 13.1 million bales, 860 million bales lower than the August estimate and 1.3 million bales (9%) below the 2022/23 crop.

 

Subsequently –

 

The 2023/2024 U.S. cotton yield would be the smallest since 2015/2016 and 2010/2011.

Please note cotton futures traded $227.00 in April of 2011.

 

 

Subscribers should also know that India, then number 1 producer of cotton in the world will also have a short crop this year.

India’s cotton crop is projected at 25.0 million bales, nearly 4% (1 million bales) below the 2022/23 season.

 

Global cotton ending stocks for 2023/24 have also been slashed now at 2.9 million bales (3.5 percent lower than the last year) as mill use is estimated to exceed production.

 

Cotton futures have been consolidating between $83.70 and $90.30 as harvest should be completed in the next few weeks.

 

Those of you that have an interest in Long-Term accumulation should call for entry levels while prices are still within my lower 25% parameter.

 

I will discontinue accumulation over the $96.50 level.

 

My price objective is $180 basis spot which would be the upper 25% of the Long-Term trading range.

That would be a $43,000 move per contract from present levels.

 

Again, please call for Money Management Strategies that are so important when one makes an investment of this nature. 312-630-7763.

 

In the meantime –

 

Have a great year trading…

 

Best wishes,

 

Frank

Questions? Ask Frank Petricca today at 312-690-7763.