As this was written, the Llano Estacado was getting precip on just about all of 1-S, in the form of snow and sleet. Accumulation is 2.5", and very welcome, although much more is needed.
For the last 3 weeks, cotton has gotten on board the industrial commodities train, with crude, copper and the SP all making significant highs. Chicago markets have settled into a big chop, as SA weather has improved crops there. Copper is at a 9 year high, the SP is at an all-time high, and crude is at a 13 month high, rising 75% since early Nov. Cotton is up 84% from its Apr low, and is at a 2.5 year high. JPM is touting a "new supercycle," and sees commodities going much higher due to new climate construction, new infrastructure, stimulus, and deficit spending.
COT reports show huge gains in net longs by specs, funds, index traders, managed money and swap dealers. The market may finally be approaching a record in net long positioning.
Anticipation of inflation, and a surge in textile demand, is putting the heat into the market in spite of world supplies being historically large. A huge shift in supplies from the US into Asia is creating surplus there, and shortage here. We witnessed this from 2010 to 2014, as China initiated by gov dictate enough to rise from a carryout of 11 Mb to 65 Mb. This was 90% of use in 14/15, which compares to this year's ratio of 94%, a new record. For a spec trade, we like buying a May 82 Put against selling a May 100 Call for a credit of 30 points. Farmers should hedge another 10% in Dec at ~8500. Risk is 32c above loan.
Yet another trend line is in within easy range, via a line starting at the major high in Sep 2011 at 114, then crossing the major high in June 2018 at 96.5, and crossing this week near 89.5. All timing events and repeats for this bull have either been sliced through, or were minor events. The next timing event is a major one, as Mar is a 233 month Fib count from the major low in Oct 2001 at 2820. Coinciding with this, is a 144 month Fib count due in Mar, from the Mar 08 major low of 4001.