Varner Bros. – The Cotton Row Journal

agricultural, Charts, Commentary, News, Technical Analysis

Not a Good Week

Sales and shipments were seasonably weak, in what has been an erratic series of data in recent weeks. Old crop sales at 81 krb, and combined crop year sales of 128 were both lowest since first week of Dec. India and Viet were 1 and 2 at 35 krb and 26. Shipments were low at 379 krb, missing the target avg of 450. Sales have sunk to only 20% of the level a month ago.

The CPI was released today, and with it figures for apparel. This category dropped 3.1% year to year, one of the weaker items in the report.

A stunning surprise hit us in Kroger yesterday. On perhaps 10 trips to Australia, we became familiar with a product, maybe too familiar, of Bundaberg rum. Made in Queensland, most of the cotton farmers and traders there all had much experience with this product. The boys down under have figured out a way to export a kindred product – ginger beer – to the Delta, so that our farmers and traders can know its charms. Fairdinkum!

Varner View

Chicago markets gave cotton some coattails, as it sure wasn’t sales data that boosted price today. We keep hearing of some W TX, OK and KS farmers having to plant 3x, and some have given up and went to grain silage. Gujarat in India still needs rain, and the cyclone to the sw has gotten close, but not close enough to deliver. The Queen of the Row crops still appears to be corn, and the Dogs are soy and cotton, each with burdens at the end. How far can corn tote these dogs?

Technicals

July and Dec have both nudged up to their 21 day avgs, a fairly good barometer for price in the long term. In choppy markets, the 21 day is a loser, with price gyrating above and below the avg. Momentum has turned + on daily charts, but not yet on weekly. Open interest at 206k is drifting down toward 200k, lowest since July 2016. Specs and funds remain heavy net short, but not so short overall as OI is low. Spot chart shows an old low and a trend line offering resistance at 6950.



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