Nothing new to add for Tuesday trade. Like a tire with a slow leak nobody can fix, the market continues to decline. All the grains were soft today, with growing pessimism over global demand growth and fading interest in wheat vulnerable to winterkill from arctic blasts last week because nobody really will know until spring how badly the wheat with inadequate snow cover was hurt in the U.S. Plains, Southern Russia and Ukraine.
One analyst we follow noted that cotton was the lone exception among the softs today, with cocoa, coffee and sugar all rising. With cotton futures now under the 60 cent per pound threshold, further erosion to government loan rate support in the mid 50s is likely. As for news, the only news of significance for cotton is this afternoon’s crop harvest report.
The cotton harvest is now 69% complete, which is 3 points ahead of last year but five points behind the 5-year average. Among the 15 states accounting for 98% of last year’s crop, Arkansas, Louisiana, Mississippi and California are furthest along; all with less than 5% yet to harvest and either at or slightly ahead of normal harvest progress. Furthest behind their 5-year average are Texas at just 46% harvested vs. 69% normally; Oklahoma at 43% vs. 60% normally, and Kansas at 35% vs. 50% normally.
In other news, cotton traders are reacting negatively to reports that Japanese data shows the world’s 3rd largest economy has been in recession the past two quarters and there are also signs that China’s economy is slowing again with a rising number of bad business loans reported by China’s banks which is inhibiting their willingness to make new loans.
