2010: A softs year – But have the trends come to an end?

Market Pulse: Nov. 22, 2010

2010: A softs year – But have the trends come to an end?

Last week March 2011 cotton opened at 13250 and closed at 12315. If you were a long-term long you just gave back $4,675 per contract. In March 2011 coffee, we saw a weekly open at 20470 and close at 21125, a $2,456.25 per contract move. And finally, March 2011 sugar opened at 2630 and closed the week at 2615. Nothing major here. However, all of these markets are far from the most recent highs. Cotton hit 15195 on Nov. 10, coffee hit 22145 on the same day and sugar was at 3339 on Nov. 11. These prices were hit coming off a bullish World Ag Supply & Demand report. Of course, China’s move to cool down its economy has spooked many bulls. Actually, thinking about this you need to realize that while China may slow things down a bit, they still need to clothe and feed 1.3 billion people. And let’s not forget the country to their southwest, India. They need to clothe 1.2 billion people. As I am sure you know, these are the two largest populations in the world (the United States comes in at a very distant third with 310 million). When you look at this, China and India have 2.2 billion more people than the United States. I find this an extreme bull for all commodities moving years forward. It is all about timing. Look at the charts below and you will see exactly where and when you would have caught these long uptrending markets. Professional trend followers did extremely well in these markets. I hope you did too. I hope you and your family have a wonderful Thanksgiving. Be well, trade well and follow the trends.

Proceed to Page 2 for the latest COT data...

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