Is no news good news? Well, actually it isn’t no news it’s just very little movement. The market went from full on drama to watching paint dry. We have been in a pretty tight range playing a game of give and take the past 2 weeks. An almost toxic relationship here with .69 as we touch it we then fall off…rinse…repeat. (.6889 at this moment as I’m writing this.) Volume is blahhh also. The market seems to be waiting on harvest to start and see how this supposedly massive crop is really turning out. Some pickers have started to roll and yields have been all over the place (reports of above average in GA to rather disappointing in the Delta), but this is to be expected early.
Essentially what I’m saying is right now the market is going “I need to see the receipts.” Let’s see these yields and let’s see what USDA has to say October 12th. The October 12th report will make adjustments for all Harvey losses as well as Irma which were not all fully captured in the September report that spurred a limit down reaction. We are at 21.76M bales of production and 6M of ending stocks before those adjustments are made and that’s a huge number.
As we wait here are a few other items to just think about. China. Yes as always China. I mentioned last time about the ban they put on sales from the reserve for September. The Chinese reserve auction has been seemingly very efficient overall. Now we wonder – are they possibly getting ready to restock? Maybe? Maybe not? We quite literally sold out of cotton for 16/17 and demand is shaping up just as solid for 17/18.
So it’s still a waiting game for now. My next report could be titled Cotton Rocket or Dumpster Fire. Well, we have seemingly good support at .66-.67 or so, but this is cotton and far stranger things have happened. Grab a bag of popcorn and take a seat to watch as yields roll in, the adjustments to the crop size are made, and other cotton market tidbits pop up.
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