Varner Bros. – The Cotton Row Journal

agricultural, Charts, Commentary, News

A Rather Large Roll

The market year has not quite ended, having another 6 days to pack in some more sales. Lets say total sales for 18/19 are 16.300 Mrb, and total exports are 13.830 Mrb. A “roll” of 2.470 Mrb can be added to total new crop sales of 4.96 Mrb to get 7.43 Mrb to start the year. That compares to 8.47 Mrb for 18/19, 6.14 Mrb in 17/18, 7.08 Mrb in 11/12, and 5.72 Mrb in 10/11.

We can have some fun and games with how those years started, and how they ended up, but we have found that there is not much symmetry for a poor start to end poor, or a good start to end well. Still, a 7.43 Mrb (7.64 Mb 480 #) is a load of sales, and portends big things for planters and shippers. Our view is that a big crop means big sales and shipments, and this one is a fat potato on 1 Aug.

If the crop production is 22.5 Mb, 60% of total supply suggests a 16.5 Mb export. 65% of total supply targets 17.875 Mb. Our estimate is 17.5 Mb.

Varner View

Other than the roll guesses, the only other numbers being tossed around now are early guesses for crop size. Ours has risen to 22.5 Mb, if Aug is a good month, then its possible to hit 24.0 Mb. Mother Nature has two swings of the bat left to make a mess of the US crop, one is the dry Aug pitch, the other is a wild hurricane slider.
Re the $, we thought the high of May would be all she wrote, but the spot contract has bested that by 45 ticks. Today’s spike sort of looks like a top pattern, but no reverse yet. This strength has been maybe 1/3 of the reason behind weak ag markets of late.

Technicals

Re the $, it exhibited a couple of parameters for a peak reversal, as it gapped up to new highs (27 months), then was near the low on the close. Ditto for the Euro, upside down. The $ has also made the so-called 5 Point Sell Signal, which should not be confused with Elliott’s 5 waves. Point 1 is the new high on 4/25, point 2 is 5/13 low, point 3 is the next new high of 5/23, point 4 is a low on 6/25 (lower than point 2), and the final point 5 high could be today. We shall see.



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