Market was trading higher electronically and it was clear from the open that the objective of the day was to push for buy stops and that is what happened. Locals and specs found support above the contract highs and the market took off to a pace looking like we were headed limit up.
Despite a quiet day in the grain markets that closed slightly higher and Chinese cotton prices that were basically unchanged over night, the cotton market had a strong day and closed near new contract highs. Volume was in line with the weekly average with 27,000 estimated futures and another big day for options with a combined volume over 40,000 contracts.
Taking a look at the crop conditions in Texas, gins are reporting that around 50 - 60% of the crops in West Texas are in very good condition. Some blooming is starting to take place in early planted crops; however, it will be another 10 -15 days before the rest blooms.
There are a few patches south of Lubbock that are even further behind due to extremely late planting. For the most part, yields in West Texas should be above average due to the amount of rainfall received thus far. However, the cooler temps may hurt micronaire.
Another prevailing factor is that much of the higher yielding fields north of Lubbock have been switched to grains. The Texas A&M Extension center predicted today that the districts of 1-N & 1-S will be down 1 million bales in production. Although acreage is way down, the Valley is expecting some record yields.
marketing@alchempro.com
