by Michael Seery of Seery Futures

Cotton Futures---Cotton futures in the July contract is trading lower by 66 points at 67.25 reversing some of the sharp gains that we witnessed in yesterday's trade as there were concerns about heavy rains in the state of Texas delaying planting.

The crop progress report was released yesterday afternoon showing that 44% of the cotton crop had been planted which is right at the 5 year average as there are no concerns at this time.

I have been recommending a bearish position from around the 75.74 level and if you took that trade the stop loss has now been lowered to 72.34 as the chart structure will improve on a daily basis. For the bearish momentum to continue we have to break the May 14th low of 64.50 in my opinion as the volatility certainly has come to life and will remain extremely volatile during the summer months due to weather conditions.

Prices are still trading under their 20 & 100 day moving average as the trend is to the downside as this recent consolidation in price is just a pause in my opinion until the next leg down.

The trade war with China continues to keep a lid on prices as that has caused weaker demand for U.S cotton as it doesn't look like that situation is going to end anytime soon would be a negative towards all agricultural products and especially cotton.

TREND: ---LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: HIGH