Rio Grand Valley Blowout
Sources in the RGV say the crops there are huge, maybe huger. This, and this alone, is why the market seems not to care a whiff about certs plummeting to only 30kb. This is low enough for a small merchant on Cotton Row to take the whole shebang. But with such a large, bountiful crop coming in early from the RGV, traders see ample supplies to ship on early commitments.
If we still had a shipping crew in this office, our bias would fall on the side of rather to have the certs, than to owe Aug/Sep cotton and depend on everything working out. It could rain down there, or a hurricane could visit.
The Delta will get some rain this afternoon and Tuesday. Almost perfect. West TX forecast shows zippity-do-da into 8/05, then there are some 25% chances 9 and 10 days out.
The market swooned a bit early today, then climbed back to near unch. The low level of certs, the big sales on the books, and record COT shorts are the bull’s best friends. COT positions have not changed much, but net spec shorts have sat on a record for 3 straight weeks. The other noticeable positions were corn, in the 93% decile on the bull side, and gold and silver, both around the 80% bullish decile.
The 21 day avg has done its best to contain rallies in the last 4 days, as each day’s high was right at this avg. It is 6434 today, falling a few ticks each day. Buy stops exist at 6600, which is where a size number of new shorts would have a breakeven. Daily and weekly momentum have turned up.
As always, please use protective buy and sell stops when trading futures and options.
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