FAT TUESDAY FIGURES
The balance sheet of both the ICAC and USDA are shown alongside each other, along with our very, very preliminary, early-bird special for world new crop. We started this extravaganza in Nov and have been filling in pieces since then. Its a lot easier to calculate production than consumption, even with Mother Nature out there dealing up hurricanes and drought.
The interesting line item on the spreadsheet is the massive gap in world end stocks, with the ICAC holding the over at 5.5 Mb. How this works out will be an effort in time and finagling.
One weather service has put up a very good chance for precip on the Llano Estacado on 3/11, 3/12 and then again on 3/19. The cowboys need this, as it was 12/20 when they last saw meaningful rain.
The cotton market is banking on a successful end to the China trade issue, as is the soy market. All that is needed to send both into the bonus price is a promise from China to buy every bean and bale in sight. There is already a promise to buy 10 MMT of soy, and this market hardly responded. One savvy trader said the trade promise was the only reason soy was not trading below $8. In other words, the promise is already baked in. As for cotton, there is so far no quantity mentioned for purchase, but several traders have opined China will buy 1 Mb, +.
We just wish this issue would be settled so we could get back to trading hard numbers, not hype and hearsay.
The old crop/new crop spreads are gaining, and May is teasing with closing above the 55 day avg. A year ago May peaked on 3/13. A seasonal high is due now.
As always, please use protective buy and sell stops when trading futures and options.
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