'The Point I'm Tryin' to Make'
Sales at 321 krb were best in 6 weeks, 2nd best of the year. Shipments of 245 krb were best in 5 weeks. Pak was tops at 130 krb, China was 2nd at 92 krb, and Turk canceled 40. A pretty good week, and not much market reaction, which means these figures were baked in the week they were made.
Open interest is exactly 1/4 M, same as year ago at month end. Last year OI shed 50k going into FND, with price dropping from 66c to 62c. In 2018 OI dropped from 267k to 223k at this time period, price falling from 79c to 75c. The 2017 year is not a worthy comparison, as OI that year was largely flat at around 225 from late Aug to late Nov, and price rose about 3c from late Oct to notice. 2017 was one of only 2 years in a 15 year period with a rising price profile.
One undeniable stat for the bull side is that cumulative exports are in 1st place since the 04/05 year, tied with 3 others right at the 3 Mrb mark. Those years are 05/06, 07/08, and 08/09. The 05/06 year should be disregarded, as it was the end of Step 2. The 07/08 year finished at about 13 Mrb, and 08/09 finished the same. The point being, as Dr. Bell would say, is that a fast start does not project to a fast finish. See chart below.
Those of us old enough to know Dr. Tom Bell, will recognize today's title. A true character of time and cotton.
Today's GDP grabbed headlines as it was a record gain, Q2 to Q3, of +33%. Comparing it to Q3 year ago, it was -1.7%, and compared to the record high, it was -2.7%. Quite a recovery, whatever one thinks about the future. Most of the commentary and analysis we have read from notable, reputable trade houses suggests next year will be one of solid growth, partially helped by all of the gov stimulus. Few are those who see a slowdown, or worse, for next year. It does appear that a corrective phase is beginning for most markets, some with large or record spec long positions. Row crops are particularly vulnerable, as they move into liquidation of the Dec contracts, which normally carry the highest open interest all year. Corrections are normally not orderly, and often zig and zag, throwing off open interest on both sides. Hold Tight.
Should Dec close about the 7000 level, or lower, on Fri, it will make a bearish engulfing pattern and reversal on weekly chart. Dec made such a signal on Wed on the daily chart, as the close took out the lows of the previous 5 days. This reversal has occurred in a week chock full of timing events, so timing now has the chart pattern to confirm a top. What kind of correction is coming is anybody's guess, but the first noted seasonal timing calls for a low on 11/14 and another on 11/21.