Cotton Defending New SupportAfter the gap higher in Cotton last week, we have seen sustained price action out above that gap and is now acting as a strong support pocket going forward. This rally higher was led by weaker crop conditions with the ongoing drought in Texas, and the market is now in a tightening range. With the strong support pocket below and overhead trendline resistance, we could see the market breakout above this trendline resistance and climb higher is crop conditions continue to look poor. Downside risk comes if we see better weather conditions that will help the crop conditions and could take the market back below the gap.
