by Michael Seery of Seery Futures 

Cotton Futures---Cotton futures in the December contract is trading higher for the 2nd consecutive session up 25 points at 63.78 continuing its bullish momentum erasing some of the sharp losses that we witnessed in Monday's trade.

If you take a look at the daily chart a nice rounding bottom chart pattern has developed as I still think higher prices are ahead. Fundamentally speaking the USDA crop progress report indicated that 87% of the U.S cotton crop had bolls open as of 10/13, 4% above normal as harvest was 32% complete which is 5% ahead of the average as condition ratings were down 1% to 38% gd/ex.

I have been recommending 2 bullish positions originally around the 61.50 level then adding a 2nd contract at 63.60 as adding to winners is the way to trade over the course of time in my opinion and if you took that trade continue to place the stop loss under the 10-day low which stands at 60.79 as an exit strategy.

Cotton prices are trading above their 20 and 100 day moving average as the trend remains strong to the upside, however for the bullish momentum to continue we have to break the October 14th high at 65.85 & if that does occur prices could test the next level of resistance around the 67.50 level so stay long.