Standing in high cotton
you noticed more polyester products in your stocking
this year don’t blame Santa Claus. It is just that the
synthetics are about a quarter of the cost of cotton
after this fall’s historic upward spike. But don’t fret
because, as they say, ‘the cure for high prices is high
there could be a massive cure already under way in cotton.
Commodities analyst Shawn Hackett says we could be near
or in the midst of an historic shorting opportunity.
Hackett says that in past generational moves in the
fiber, which this fall’s rally certainly was, cotton
typically corrects sharply —as it did in mid-November
— and then attempts to test the high before a precipitous
fall. We spoke with Hackett on Dec. 10 after cotton
settled well off its high. Hackett could not say for
sure that a high had been reached, but wasn’t taking
any chances as it already had retraced about 65% of
made its historic highs after two tough years that included
crop failures in India and Pakistan, and fear of shortages
leading to restrictions on exports from those nations.
expects cotton to drop 50% from its high, potentially
taking it below 80¢ by the end of the first quarter.
He says if the sell-off is already under way, the November
low of $1.11 should provide a speed bump for shorts
late to the party.