A FEW WORDS FROM TOM

  The underlying fundamentals of the cotton market remain pretty sound - yet, from the markets recent behavior of making a new December high of .7920 and four days later trading back down to a low of .7630. It scares me! As of today, June 2ns, we have not violated the trend line of .7620 to the downside.

     The global supply of cotton is lower and demad is higher such that global production for 2010 will not increase global ending stocks this season. Consumption will continue to outpace production. Then we ask ourselves, why is the market down? Several answers to that question/ 10 I have never seen a market that went up that did not come down. 2) All markets see into the future therefore that is why it is named futures market. What it is seeing today is a U.S. crop nearing completion of planting and off to a good start. It is seeing the cash month of July which put in a high of .8600 four weeks ago and trading today at .7820. Down a whopping 8 cent per pound. Never thought I would see it back in the seventies. 3) What is it trying to tell us? Is the world economy going to be on shaky ground at harvest? Can consumption continue to climb or at the least remain stable? Will there be financial collapse in Europe? Finding the answer to these questions is about as easy as capping a 6" pipe in the Gulf of Mexico! We never know what will affect the Futures Market! One thing I do know and that is to sell into a rising market. I repeat the statement I made last month,"You can't go broke making a profit." I would like to remind each of you that know you will be farming in 2011 and 2012 to price some .7500 cotton. Cotton prices in this range will continue to attract acres in both hemispheres. One thing that is happening around the globe is BT cotton seed is becoming readily available. One region in India has gone from 3.2 million bales to 9.7 million bales with only a 10.5 percent increase in acres over the last 10 years. That is an increase of 300 percent. These folks are our new competition and .7500 cotton to them is profitable.

     We have been making higher highs and higher lows the whole month of May. The low for the month of May is .7620. A violation of that level violates the bullish sequence of the last 30 days. Calm your nerves, put in your pricing orders or (lower them) for less than .8000 and look for another leg up in the market. Be safe, farm with tenacity, and turn that dirt to gold.

                                                     Yours in Cotton, Tom

Tom's cell (229) 328-5656              Jon's new cell (229) 319-5754

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