Pre-Irma Production = 21.3 MB
After maybe 50x through the spreadsheets, we are worn out with calculations, estimates of yield and abandonment, and more estimates of what Harvey did. US production in the Sep report will be north of 21.0 Mb, due mainly to more acres, and ideal conditions. The small amount of damage done by Harvey will be overwhelmed by other considerations. It was decided to simply stop there, and wait and see how Irma tracks before committing any more time to assessing potential losses. And the report will have none of Irma figured in, so best leave it be for now.
Next Mon/Tue will offer cotton traders a couple of days akin to hurricane trading when actual humans filled trades. Monday is the peak of the hurricane season, and Sunday is the day of expected landfall, and Tuesday is crop report. At the moment the track shoots up the gut of Florida then veers NE. A deviation of just 50 miles either way, which is highly likely, will mean much to cotton.
Varner View
The production estimate of 21.3 Mb may be the biggest of the year if Irma does some real damage, but if Irma keeps inching eastward, it may not be. Ignored by all the hurricane hype is the rest of the US and world crops, which are doing quite well, thank you. We expect the Indian crop to rise by at least 1 Mb, and clear the 30.0 Mb mark. The Pak crop is expected to slide down 150kb due to acreage adjustment. With the Southern hemisphere beginning to plant, the Brazil acreage will jump a little, and so would other countries if they have the water. In this report, look for world production to get above use. The USDA will likely use the standard 60% of available supply to estimate US exports. We remain long term negative.
Technicals
One very clear signal that the market has made a top will be if Thursdays low is taken out and closed below. Then to turn the trend back down, Dec must punch through the gap 7195-7200. This gap is right at the previous support level of 7215, which contains 3 lows and 2 highs.
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