Whats Up With Lumber & The Soft Commodities

Cotton Futures--- Cotton futures are still trading below their 20 and 100 day moving average basically settling unchanged for the trading week with major support at 83 and major resistance at 87 as the USDA this week stated that the new crop production was kept unchanged along with consumption which still tells me lower prices are ahead but at this point in time there really is no trend in cotton as we are trading midrange in the last couple of months but I do believe commodity markets still look weak despite the fact that Ben Bernanke continues to try to prop up asset classes.

 Cotton prices rallied earlier in the week along with grain prices as hot temperatures in Oklahoma and Texas and they are worried about drought conditions in certain areas, however as the week progressed prices can back down to reality and with weakening demand in China I still believe lower prices are ahead but I'm advising traders to sit on the sideline until 83 is broken and then I would place my stop loss at the 10 day high minimizing risk in case the trend does change.
 
Coffee Futures--- Coffee futures were down 400 points today and are trading below their 20 and way below their 100 day moving average still stuck in a 4 week consolidation looking to retest contract lows at 117.10 settling last Friday at 121.25 going out today around 119.50 right at a 3 year low and it looks to me that prices are still headed lower as coffee is considered a luxury item and with deflation in the year coffee prices might retest 100 a pound in the coming months. Coffee prices have been in a steep decline for 3 years now and finally they are starting to stabilize with volatility near all-time lows because generally coffee is one more volatile commodities but in recent weeks is just been very quiet & one of these days this volatility will pick up again but at this point it looks to retest 100 a pound in the next couple of months as the classic bear market continues with the slow grinding down moves on a daily basis.  (more)

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