Goldman Short Cotton Trade Ends (BAL)
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Goldman closed its put trade on cotton after the price dropped from 85c in December to 75c recently. There is a potential for the prices to continue lower in the second half of the year, but Damien Courvalin, an analyst at the bank doesn't think it is worth trading.
"We see limited risk-reward in trading this view in the short term, as we forecast lower U.S. cotton acreage than the U.S. Department of Agriculture, and expect the agency to reflect this in its June 29 acreage report," he said.
The price of cotton is driven by changes in U.S. inventories and corn prices. Traders can use iPath DJ-UBS Cotton ETN (NYSE: BAL) to gain access to the commodity.
"We see limited risk-reward in trading this view in the short term, as we forecast lower U.S. cotton acreage than the U.S. Department of Agriculture, and expect the agency to reflect this in its June 29 acreage report," he said.
The price of cotton is driven by changes in U.S. inventories and corn prices. Traders can use iPath DJ-UBS Cotton ETN (NYSE: BAL) to gain access to the commodity.
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