Varner Bros. – Cotton Row Journal

agricultural, Charts, Commentary, Cotton futures, News

Enough to Choke A Horse!

One of the weather services about 2 weeks ago said the persistent rains crossing through Dixie would shift northward in May.  They got that right.  The Delta is on a 10 day dry spell, coming at an opportune time to finish planting.  The middle of TX is getting rains through Thur this week, then its dry across the belt.  From Firebaugh, CA, to Savannah, GA, things look about as good as we can remember.  

Outside markets are noisy, with gaps and hard reversals in grains and a violation of a 3 month low for stock indexes.  Cotton is more or less paying no heed to the noise, and is quietly trading its own mettle.  Sales and exports are delayed till Friday, and it is our assumption will be another good week.  We had thought previously that the USDA was overly optimistic for sales at 17 Mb flat for new crop, but the old adage “if we grow a big crop, we have big exports” seems true.

Can anyone recall a year when the Indian monsoon started on time and was not initially disappointing?

Varner View

The corn market continues to dazzle, while the rest of the ag sector is left to mire with trade disputes, hog diseases and a swooning stock market.  Cotton is easing into summer with a near-perfect beginning, as it would take 2-3 weeks of no rain, somewhere, in order to inspire crop fears.  New crop is looking like a year of “big and bigger” with crop size and exports, and maybe some records in yield and abandonments.  We are looking for places to re-enter shorts and hedges into mid June.

We just had some fun and harvested the entire US crop today.  As things stand now regards weather, soil moisture, forecasts, etc.  Check out table below, and see if that figure can choke a horse.

Technicals

Initial targets were satisfied for July and Dec on this rally, and we note one more on the spot chart at 6953, the low of 2/14 (the Valentine’s Day low).  The next point is the gap from 7320 to 7478, caused by thin trading in May notice.  Seasonals remain + for cotton to 6/13, so we caution traders not to be too eager to shoot all their bullets at once.  



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