Districts 1N and 1S in TX are most severely hit by drought, with 86% and 59% of acres very short topsoil moisture. The subsoil readings are 31% and 71% very short. The other 2 W TX districts are showing shortages of 30% to 55%. Easter weekend to 7 Apr offers some chances for rain.
One private source opined a cut of 12% for Indian cotton acres. He cited bollworm losses as the reason. We find it strange that there have been no press stories quoting sources suggesting the answer to bollworm issues is to simply buy new bt seed. India is not the worlds lowest average yielding country, but seems to do everything possible to try and achieve that status.
Varner View
Following a decline of nearly 6c, mills and specs raced each other to add to longs and fix price. The market seems to have found a price comfort zone in the low 80s. Headed into the Easter weekend looks like much drama. The acreage report is due on 3/29, and the 10-16 day forecast is calling for chances of rain for the Southern Plains. The chances are fuzzy and around 25% to 40%, with amounts from trace to . But this is a huge shift in absolutely nothing.
Technicals
May reached nearly to the first level of support we mentioned around 8065, and bounced. The high/low in the last 3 weeks is 8660/8067, and todays high almost reached the mid point of 8364. We noticed an interesting feature on the March continuous chart, which is a plot of the lead Mar contract and rolling to the next Mar on expiry. A huge roll gap opened when Mar 14 expired, from 8750 to 7900, which was partially closed on a rally to 8377 in May 2014. The rest of that gap was recently closed, nearly perfectly, as Mar 18 expired. Gaps matter. Now a new roll gap has been opened from 8420 to 7880. A rule of thumb is to trade in the direction of the gap, and to fade any price thrust in the gap.
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