The Great Depression era in U.S. history saw four million acres planted annually in Mississippi. While cotton will return as King of agriculture in Mississippi, the states once dominant role in both the U.S. and world cotton industries, is now just a part of history.
Yet, the Sun still shines on the December 2008 contract. As the nearby December contract fell, the red December contract held reasonably constant. As suggested last week it is the December 2008 (red December) contract that will carry the market. While that contract will likely experience some price slippage from time to time, its job is to move higher--and it will.
Marketing year 2006-07, with just three remaining report weeks left in the season, had net export sales for the week ending 7/12/07 of 29,500 RB of Upland with Pima at 5,100 RB. Sales for the 2007-08 marketing year included Upland sales of 59,800 RB bales and Pima of 49,000 RB. Shipments were sufficient to meet USDA's target of 13.0 million bales for the season, totaling 423,700 RB of Upland and 14,000 RB of Pima.
The Friday sell off amounted to a thorough house cleaning as most of the speculative funds took profits as did the bullish option strategies earlier placed by the trade. With December back near 62 cents mill demand should surface and export sales, reported two weeks from now—for the 2007-08 season—should be impressive.
Too, the near 50% retrenchment should bode well for the market to try totrade back to the 64-65 cent level. The low 60's should hold, but there is risk down to 58 cents.
marketing@alchempro.com
