Daily Market Update - September 10, 2014

 

by Ron Lee

 

Highway 118 West, PO Box 171

Bronwood, GA 39826

Work:229.995.2616

Mobile:229.881.3903

ronlee@mccleskeycotton.com

 

Agricultural Settlements

Commodity                 High                 Low                  Close               Change            YTD     

 

Dec 14 Cotton            .6739               .6533                .6714               + .0135            - .1129

Mar 15 Cotton           .6636                .6496                .6633              + .0089            - .1263

Dec 15 Cotton            .6900                .6788               .6926               + .0082           - .0955

Dec 16 Cotton                                                               .7069               + .0082

Dec 14 Corn                3.4725              3.4300            3.4575             + .0150            - 1.0450

Sep 15 Corn                3.8200              3.7875            3.8100             + .0075            - .8200

Nov 14 Soy                 9.9900              9.9000            9.9375              + .0100           - 1.4125

Nov 15 Soy                10.0975            10.0475          10.0550            - .0075            - 1.2125

July 15 Wheat           5.6575               5.5750            5.5775             - .0675            - .8750

Wednesday's Market Report
 Even if this is nothing more than a short covering rally, December cotton continued its impressive climb toward higher prices today, gaining 135 points and settling at .6714, the highest close since August 27th.  Deferred months were higher, but little traded October and December led the way as the market pushes back toward inversion.  The grain markets were very quiet in pre-report trading today with the exception of the wheat market, which continues to get a bloody nose nearly every day.  Wheat prices slipped another 6-8 cents as ample US and world supplies and a stronger US dollar kept prices at bay.  Corn and soybeans were a penny either side of unchanged as traders wait to see what kind of surprises the USDA has in store for tomorrow, as well as weather concerns for later this week.  It would certainly be a bullish surprise if the USDA did not raise carryout in all grain crops tomorrow.  Outside of the ag's, it more of the same today.  The stock indexes are fractionally higher, while the dollar is continuing to hold strong above 84.00.  Crude oil prices are considerably lower on higher gasoline supplies.  Traders are also watching our esteemed President and his comments about ISIS on the anniversary eve of the September 11th attacks.
Inside the Cotton Market
 Funny that we mentioned the October contract yesterday and I'll make it a topic for the 2nd time in five years today as the contract gained 236 points, actually closing above 70 cents as the hunt for bales in the short term continues.  Anybody that was crazy enough to be speculatively short the illliquid October is about to get a good lesson in losing money.  Nevertheless the buying was strong today in the December contract amid very heavy volume (23,000+ contracts) and I would think the majority of this was speculative short covering as the market just could never press lower this week after a solidly lower close on Friday.  With the USDA report on tap and the almost-universal thought that the agency will lower the US crop, thus decreasing ending stocks, shorts decided to bank their profits ahead of the numbers.  The August high of .6772 stands in the way of a further advance, but there is nothing saying that positive numbers want push prices through that level.  However, any advance past .6800 and certainly up toward .7000 would be met with heavy trade selling one would think.  And I think it would be very wise for growers with unsold bales to have GTC orders in ahead of the report in the morning between .6800 and .7000 basis December to sell additional bales in anticipation of a "Buy the Rumor, Sell the Fact" type trading environment.  With grain prices where they are and where it looks like they may be headed, it would also behoove those of you looking to grow substantial cotton acreage next season to look at pricing some 2015 and 2016 cotton at prices above .7000 if we get another good push tomorrow.
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