Have The Soft Commodities Bottomed?

Cotton Futures--- Cotton futures continued their bullish momentum settling last Friday at 88.93 and going out this Friday at 93.40 up 450 points for the week and is up over 800 points in the last 2 weeks trading far above their 20 and 100 day moving average hitting a 1 ½ year high this Friday afternoon. The USDA predicted 13.052 million bales in the crop report which came out last Monday, but analysts are figuring that the crop is going to be shrinking as harvest starts to begin due to the fact of extremely hot weather in Texas and the crop is way behind in some of the other Southern states due to the wetness and cool temperatures.
The trend is your friend in commodities and as I wrote in last Friday's blog you should be long this market and I still believe prices could head higher but make sure you do place your stop loss at the 10 day low which is a good distance away but will be tightening up in a couple of days as the commodity markets as a whole have been rallying pretty significantly in recent weeks. The great thing about the cotton contract is the fact that it is very large and if you bought this when prices hit the 4 week high at 87 the 10 day low at the time was 84.50 so you are only risking around $1200 per contract and if you're still in this trade you are up over 600 points is now $3,000 per contract and in my opinion whenever there is a low-risk situation with a high reward possibility you should always take that trade regardless of your opinion. TREND: HIGHER -CHART STRUCTURE: POOR
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