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Current Positions
10/8 – Short 440 May corn Straddle. Sold for 40¢, currently at 23.75¢
1/21 – Long 425 March corn call. Bought for 5¢, currently trading at 4.25¢
1/21 – Long 1 March Rice Futures. Bought at 10.775, currently trading at 11.17
As a reminder, we will not typically advise on position management, that is up to you. Occasionally we will send reminders or notes if we feel necessary. Feel free to call us at 800.558.3431 and ask for a broker if you have any questions.
Long Cotton Recommendation
We’ve had this recommendation to buy cotton waiting in the wings for quite some time. This market just did not want to stop going down, but we now feel it is time to step into this trade for a few reasons.
- The market has absorbed a tremendous amount of bearish news already.
- Bit early to say for sure, but we feel acres could be down significantly this spring.
- Barring a couple of days, cotton traded to its lowest level since mid 2020. “Buy low” they say.
- Large speculators are significantly short this market.
- They’ve bought quite a bit after setting a record net short, and futures have not yet responded, but this remains a supportive factor over a longer period of time.
- Technically, futures are set to post a 5 wave buy signal today. May futures just needs a close over 63.81.
Recommendation: Buy 2 May cotton futures, at the market.
– Alternatively, you could buy on a close over 63.81. (The high of the day that traded the lowest price of this move).
Risk Exit: Sell stop at 62.80, GTC.
Target: Purely technical.
– Target 1: 67.00, recent highs.
– Target 2: 69.00. Long-term trendline resistance and ~ the October high.
– Target 3: 71.00. September Highs.
Graphics:
Feel free to call our office to speak with a broker: 800.558.3431.
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Disclaimer: The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Brock Investor Services, Inc believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice is based on the opinion of Brock Investor Services, Inc and reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. There is a risk of losses as well as profits when trading futures and options. This brief statement does not disclose all the risk aspects of derivative trading, therefore careful study carrying FCM’s Risk Disclosure is strongly encouraged before the recipient of this email trades.