On Thursday and Sunday we rode through three counties in the central MS delta, three in southeast Ark, and all the way from Lake Village to Monroe in LA. The cotton in these areas looks wonderful, and our bias is that yields are better than what the USDA says. We also rode through districts 5-N, 5-S, 4 and 8-N in Texas, and what little cotton we saw was magnificent. No bumble-bee cotton here. Mostly dryland, it was defoliated and being picked, with local farmers hoping for much better than average yields. This runs opposite to how the USDA is pegging that part of the Texas crop.
Looking at dryland cotton in Texas is one thing, and then looking at the soil moisture levels is another. In the districts mentioned above, upwards of 80% of each district is in a very dry state. This runs against our own eyes and ears, as local farmers were what could be termed as "guardedly optimistic" on yields. Rains in July were good enough to give the crop a lifeline, and our guess is that yields in Texas will surprise to the upside, even though this is another year of extreme abandonment.
Not much to comment on regards cotton, as it is hemmed in between the 13 day avg at 8460 and the 21 day at 8493. Trend line resistance remains at 8570, along with the 89 and 144 day avgs. This is our preferred selling area. Seasonal trend is slightly positive into September 21.
As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar). We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow.
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