Our estimates for SD were printed in the survey, so no repeat. We are using TX abandonment of 9%, yield of 750 #/a. US abandonment is 6.3%, yield of 873 #/a. End stocks of 6.95 Mb, produce a ratio of 33.5%. The USDA is at end stocks of 6.4 Mb, and this may be set for this month too.
A tropical storm is brewing in the Gulf, with landfall at Grand Isle Sat, and near Natchez on Sun. If it then tracks due north it will give the entire Delta a drenching. Cotton and grains will love this, with rice not so happy.
There was an excellent article written by George Melloan in the WSJ on world central banks. Melloan thinks all of the easy money in the last decade has about exhausted what it can do to lift economies. Good read.
Our bias is that the low near 6025 made on the spot contract twice in the last 4 weeks will hold through the market year. Most concerning is Indian weather, and there is always worry over the Llano Estacado. Even though W TX has had a wonderful overall start, Mother Nature can still stir up a mess in the back half of the growing season. If the Indian weather continues to disappoint, and W TX goes dry for a while, the specs are larded up with shorts, and could give the market quite a ride if they cover.
The spot chart has gotten a nice lift from the roll, and has created a double bottom at 6025. If this low holds, and if the market is now in a corrective mode of the entire move down, retrace levels are multiple and some are way up there. There is an old low at 6953, coinciding with the 23.6% retrace at 6867. Then there is a massive gap from 7380 to 7500, which contains the 38% retrace at 7400. These levels are +6c and +10c, and would require a real summer weather scare to engage.
325 Cotton Row Cleveland MS 38732
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