Nate

agricultural, Charts, Commentary, News, Technical Analysis

Sales were good at 185 krb, with Viet high at 55 krb, then China at 42 krb, then Turk at 37 krb. Shipments were small at 120 krb, but in a month this number may double. New crop sales were good at 29 krb, all to Pak. So far there is no evidence that large crops in ROW will slow down US sales.

 

Nate. Wednesday at 0845 Central the world discovered Nate and the button pushers took over. In 2.5 hours specs goosed up Dec by 225 points. Todays predicted landfall centers on Bay St. Louis, MS, with a spread between Baton Rouge to Pensacola. This is west of the track yesterday, which should mean less rain for the SE crop. Nate will be a TS or perhaps a Class 1 at landfall, much like Irma. Rain on the SE crop or that of the Delta is definitely not wanted. Virtually all of the Delta crop is open, with LA estimated to be 65% harvested by Sunday, and MS at 40%. The SE crops have harvested little, but they are also largely not defoliated, giving some protection to open bolls. If all goes well, Nate will only give the Alabama crop a good soaking, missing both the SE and the Delta.

Varner View

Throw in a freeze scare for the Llano Estacado next week, and one has to wonder why cotton did not trade limit on Wed. Temps are forecast as low as upper 30s for the northern High Plains Tue night, so if temps warm up soon there will be little impact on that crop. Once again, a crop report will be released without inspectors having knowledge of any damage done by Nate. Our guess is that the USDA will decrease the GA crop by at least Mb, as the same people also dropped the crop index by a wide margin. Its going to be interesting to see crop numbers on the survey. We are working on ours now. Continue to sell rallies, fade these weather scares.

Technicals

There is a mild seasonal pattern showing a high around mid month. Reliability is not good, so we advise not to trade for this. It would be a better idea to see if a bounce occurs around mid month, then sell into it. Oct expires next Tue, and is holding a small 50 tick premium vs Dec, so the continuous chart will change little. Current price is below key moving averages, trend is down, and good support lies 2c lower.


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