Good Grief! Another storm? Yep, and this one looks to take a similar track as all of the others. The last 3 days most of Dixie got drizzled on, backing up harvest, but now there are 2 weather events working to tangle and delay harvest. The tropical storm will put 2" to 4" on the Delta crop not harvested, and move into the upper NE to irritate and delay those areas. A strong cold front with rain, sleet and snow is over all of W TX and OK now, and won't move out till Wed evening.
Countdown to rolls and Dec liquidation will begin end of week. The specs are larded up on the long side, and are facing mills who are larded up with on-calls. Maybe these 2 extreme positions match perfectly and there is no volatility, but we doubt it. History of this market going into Dec notice is usually negative, and examples of rising price from end of Oct to notice are few.
We looked at the past 15 years of Dec history, from Oct 28-30, to a day or 2 prior to notice. In 13 years price declined, using average daily prices. The two positive years were 2017 with a 300 point gain, and 2016 with the same. 9 of the 15 years had price declines from 265 to 400 points. Two years had price declines of about 650 points (2008 and 2014). In 2 "outside" years there were price declines of 1500 and 1000 points, but those were during the China hoarding madness, 2011 and 2010. It all comes down to cert stock deliveries, and by Halloween it gets difficult to get cotton to warehouses and graded in time for delivery. There are only 38.5kb in certs now, and the constant rainy harvest has pushed this crop from 3 weeks late to 4-6 weeks late.
Repeating, Tue is a Fib 144 count from the major low of 4/02, and Fri is 147 days from that same low, which matches the period from the Sep 2019 low to the Jan high. This week is thus ripe for some kind of reversal. Tue also falls on counts of 34 and 55 from minor lows made on 9/09 and 8/10. Fri is just as time sensitive as Tue, as it also falls on end of month.