H & H
There are a lot of moving parts in this market, including Sally, the election, Trump vs Xi, and so on. There also seems to be several gorillas in the room, and perhaps the biggest, meanest of all, is the specter of inflation. Fed Chief Powell has gone completely over to perhaps the world's biggest promoter of all. One of these days, there will be books and PhD theses on the differences between Volker and Powell. The CRB is performing as Powell wishes and desires, as it just went through a mild correction of 8%, and is now 58% above its Apr low. The wild deficit spending, helicopter money, record low rates, and bond purchases all loudly proclaim inflation is upon us. Makes us wonder what brave soul is out there to defy and stand against all of the inflation predictions? Check out Hoisington and Hunt's newsletter sometime. Their thinking is that when national debt equals GDP, the economy is so burdened with debt that the economy slows, monetary velocity slows, and the country gets into a situation much like Japan. That country has spent decades with various stimulus programs, all pretty much duds. And there is never any inflation.
Sally put down 1" to 4" from GA to VA, but one station about 50 miles from the coast in SC got 6".
Sales on the books total 7.9 Mrb, against expectation of shipping 14.2 Mrb (56%). Here is how the most recent 5 years looked in this category, comparing sales the 2nd week of Sep to final exports. 19/20 sales were 8.6 Mrb, export final of 15.1 Mrb, ratio of 57%. 18/19 sales were 9.2 Mrb, export final was 14.4 Mrb, ratio of 64%. 17/18 sales were 7.0 Mrb, export final was 15.5 Mrb, ratio was 45%. 16/17 sales were 4.8 Mrb, export final was 14.5 Mrb, ratio was 33%. 15/16 sales were 3.0 Mrb, export final was 8.9 Mrb, ratio was 34%. This year and the most recent 2 years at 56%, 57% and 64%, are much above the latter 3 years of 45%, 33%, and 34%. Some say the sales are "front-loaded," and will cool later on. Others suggest the current export estimate is too low. That figure is dead center 60% of total supply, so for a while this likely stays in place. We are worried that 21/20 will not be nearly as healthy for consumption of commodities as the period before the Corona breakdown.
A negative seasonal is in gear, and a 5 Point Sell signal has been made, along with the first short entry. But little is happening other than this market having trouble with historical resistance around 66c. The $ is providing no signals or coattails, having traded in a narrow range since late July.