Market Overview

MWS Capital Sees A Long Term Bull Market For Cotton (MON, DD, DE)


Matt Shapiro of MWS Capital said in an interview on CNBC that cotton prices had a great run recently on strong demand from China, and poor harvest.

He thinks that Monsanto Company (NYSE: MON), E.I. du Pont de Nemours & Company (NYSE: DD) and Deere & Company (NYSE: DE) will benefit from rising cotton prices. He likes E.I. du Pont de Nemours & Company (DD) because of its dividend, and he also likes the fact that this company sells seeds and synthetic fibers.

He also said that investors should be careful, because cotton prices can be very volatile. Matt Shapiro shared his experience with cotton prices from 1996, when cotton reached its high and traded lower for many years. He thinks that cotton is in the long term bull market, but if the weather improves in the short run, he would enter cotton futures, on some extreme sell off, at $80 to $90 per pound. Cotton futures currently trade at $124.71.

His recommendation for derivatives traders is to look for volatility in cotton futures, and he also noted that cotton options are allowing you a delta neutral trade. Outside of cotton, he likes iron ore and uranium.

Posted-In: CNBC Matt Shapiro MWS CapitalLong Ideas Media Trading Ideas


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