Varner Bros. – Cotton Row Journal

agricultural, Charts, Commentary, News

Poor Start for Monsoon

It wasn’t long ago that Cal, AZ, NM, OK, KS and TX were all in drought, or severe.  Scratch that, as Mother Nature has delivered payloads of rain, from coast to coast.  There may be weather issues for cotton in other countries, but not here, at least not now.  One weather service says the Indian monsoon will sputter early, then kick into high gear.  We can’t recall the last time the monsoon served India and Pakistan well and timely, so maybe weather worriers can focus on these two countries for their entertainment.

Forecast for W TX shows rain chances Fri, Sat, Mon and then again Mon Tue the next week.  The rest of Dixie gets on and off rains, unwanted, but there is currently a 7 day drought working by which much will go into the ground.

Varner View

When Dec was trading mid 70s, we were screaming for farmers to get 75% hedged, due to the enormous risk of +$100/b over loan.  That risk has been cut down to “only” $50/b, but it is still too much.  Adding in seed subsidies and equity prices, cotton still returns a decent profit at trend yields.  And speaking of which this is looking like one of those outlier years in which yields shoot for records, same for abandonments.  We encourage planters to keep both eyes on a bounce, and sell into it.  What that bounce looks like is unknown to us for now, but something just underneath 70c would be nice.


These pages wrote of a double long term Fib count event, due Monday, +-/ a day or so. For now, it appears this mathematical tool some 800 years old has worked well. The multi-year high of 9650 on 6/11 was met with a major low 233 days and a few hours after, at 6450. Because this timing event worked so well, we searched the chart in recent history to see if this count was evident in prior periods. It was. A major high occurred mid July 2017, and a major high occurred early Aug 2016, each within a few days of the exact count. Chart below shows these 4 repeating 233 day cycles, which have come in sequence of a major high, major low, multi-year high, and now a major low. The moves going into these events were +22c, -21c, +30c, and -30c.

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