Grain markets have slipped a bit in recent days, but have traded orderly and open interest has changed little. A rumor China was checking prices for April corn sparked a quick 8c rally at 0830, which cotton dutifully followed with its own 100 tick rally.
The Biden transition committee said they would keep the Phase 1 trade deal with China, to no one's surprise. In other outside news, new jobs added to the US workforce were 307k, against expectation of 400k. The Euro moved to a new high, and even beleaguered gold and silver have been lifted from 5 month lows. Copper reached an 8 year high, and is the darling of the entire Board. News on multiple vaccines is all good, much to the dismay of many "shutdown" politicians.
Sales and shipments should continue a good series tomorrow, were it not for the Thanksgiving week creating a little blip.
It is interesting that the Dec chart, the spot, and the Dec continuous charts have all failed at what is a triple high from 7260/7300, but the back months pushed above this key resistance. Now all charts are trading below 7300. We have started refiguring US production for the Dec SD report, and find ourselves once again trying to ascertain what level the market is trading, vs what we believe the crop is. The market is trading an end stocks level that is 6.0 Mb, or a little below. That requires a cut in production, along with an increase in exports, for it to work out. This little exercise assumes no influence from soy or the $, so cotton can only justify 72c with a pretty big change on its balance sheet.
From Dave Toth, tech analyst at RJO. This short term weakness could have long term implication as ancillary evidence warns of a peak/reversal threat that could be major in scope. This evidence includes: The prospect that the rally from 5164 low is a complete 5 wave Elliott sequence; Waning upside momentum on both daily and weekly basis; Confirmed on commensurately larger degree weakness below 6891 (2 Nov) next larger decree corrective low and key risk parameter; Historically frothy levels in our RJO bullish sentiment index of the hot managed money positions reportable to the CFTC; The market's proximity to and thus far rejection of 13 Jan 7300 high.