Two counties in TX 1S got a whiff of a frost last night, and the ne part of 1N went below freezing. However, the time of the lows was not long enough to matter. Forecast for next 10 days looks good. Give W TX 3 weeks to get into Nov without cold temps, and that crop will reach potential.
We have a rather fuzzy idea that this year marks the first time since 2010 that Chinas balance sheet can be included with ROW. Its been a while since this happened, but it does appear as if things are moving back toward something normal. Some traders have the view that in two years China will have shed itself of a massive inventory, and that this is a raging bull for 2019. We disagree, as the world has swiftly caught up with the production gap from two years ago. The world today is nearly 15 Mb over the 15/16 crop, so it matters not that China will need approximately that much in imports.
Todays action makes us wonder if some of the numbers for Thursdays report have leaked out, and show large production cuts due to hurricanes and a cool, wet Aug and Oct. LA, AL and SC would appear to have suffered the most due to rains, then there was the Irma track right over Albany, GA. Crop indexes collapsed after that, and its an easy step for some to cut that crop by a third. Today was yet another good day to sell into, as we keep advising farmers and specs to do. The US has been able to put a record export on the books due to other countries waiting until crops are known and in the warehouse before they sell. The export number for Thursday will probably be the standard 60% of available supply, but later in the year we believe the US will drop dramatically. Remain negative, sell rallies.
Dec reached the exact tick of the 34 day avg today on the high. Todays high was also at two previous daily highs, following the Sep collapse from +7500. All of the chop action since the low of 9/13 looks like a normal consolidation. A not-so-reliable seasonal high is due around mid month. Following the low of 10/03, Dec has reached near 7000 3x, and failed each time. Sell against that resistance.
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