The market is confident in a production that is 3/4 Mb smaller, maybe 1.25 Mb. As for exports, there is only conjecture and a lot of hot air. Grain markets are in a tizzy, with export estimates climbing, but cotton is into the "wait, watch and verify" program. No one knows for sure, just what China will do. Their corn supply is widely expected to be part spoiled and part phantom, and soy is being bought in record amounts to feed their return of the pigs. Cotton traders are hyper sensitive to Chinese demand, as 2011 is a fresh memory.
Our little office has a rather mixed group of professionals, but well suited to run analysis on ag markets. We have a CPA, a professional engineer, a farmer, and a cotton merchant. And we do much work with a CFA, who did a little thing on cotton production in years that had large cuts in production after the Oct report. 2019 production lost 400 kb; 2018 got whacked for 1.3 Mb; 2011 dropped a cool 1 Mb; 2010 lost 770 kb; 2009 lost 815 kb; 2008 dropped 885 kb; 2002 was down 860 kb. This analyst also found 6 years in the last 2 decades that had sizeable increases, some over 1 Mb. That means there is a 60% chance that after the Oct report, the crop size will change dramatically.
The soy market appears to be the Belle of the Ball, and if there is another 100 Mbu sale tomorrow, the 4 year high at $10.80 will tumble. There is no answer for the current torrid pace of sales, as cotton traders can see the soy market is having a fall much like cotton did in 2010.
Sales tomorrow have been rumored to be big, but no one would make an estimate. The $ was up a little today, but this had no impact on the raging bulls in the row crops. Copper was up a little, and the SP roared back from a lower start. Cotton wants to ride with the bulls, even with a world balance sheet that is loaded. Money flow, and anticipation of a carryout sub 6.0 Mb are providing support.
Once again, nothing here for cotton. Regards the $, it clearly broke above a long term trend line on 9/21, but has been mired in a sideways, 250 point range since late July. The dominant feature of the spot chart is that it held to the tick a long term positive trend line, coming off major lows in 2011 and 2014. These pages wrote that there was a consistent low every 3 years, and one can scan the charts and find these in 2020, 2017, 2014, 2011, 2008, 2005, 2002, etc. So far the $ has done little to rise off this year's major low, but the short term picture has shifted once again to +. Seasonal is negative into month end, and a major high is due 11/15 to 11/20.