Dec ’19 cotton futures start the morning strong on weak production and optimism on U.S./China Trade talks. After yesterday’s sell-off, cotton prices have sprung back with positive over-night sentiment regarding the upcoming negotiations. While harvest for cotton has been moving forward well ahead of the average pace, production has been limited by poor weather conditions and supplies are starting to tighten. If trade talks can offer positive headlines or a partial deal, this commodity will be very much under-valued. If trade talks end neutral or even negative there could still be a solid opportunity in this market if the USDA Crop Production and Supply/Demand report is bullish. Supply concerns are in place already, with bullish demand news I’d expect an upside break-out from consolidation, and perhaps even sustained bull trend.

Eric Scoles

Eric entered the workforce during the summer of 2007 as an apprentice tradesman just before the big crash and recession which followed. The impact of which strongly inspired his interest in the financial industry and began him as a student of the markets. Eric worked throughout the following years developing strong communication skills and risk management practices in the aviation and marketing industries before ultimately getting licensed and turning his passion into a career as a market strategist with RJO Futures.