Another Grand Slam

Varner Brothers

Another Grand Slam

Varner Brothers

Thought Of The Day

My doctor told me to watch my drinking. Now I drink in front of a mirror. I drink too much. Way too much.

-Rodney Dangerfield-


Varner Brothers
325 Cotton Row Cleveland MS 38732

800-4-VARNER

(662) 846-6636

info@varnerbrothers.com

For the 2nd week in a row, Uncle Sam sold better than Mb total, with old crop at 490 krb. Viet was high at 120 krb, then BIP at 115 krb (Bang bot the lions share), then China at 76 krb. New crop was big at 63 krb, China taking 59 krb. Exports were very good at 327 krb. This two-week million bale surge is reason enough for the 10c move up since Christmas.

Our export estimate is waffling around 13.25 Mb, about Mb above current USDA. We have heard some theoretical estimates as high as 14.0 Mb, but that would be a rather high jump to make. If our production estimate is about right at 17.11 Mb, that means the US will export 63.3% of available supply. This is high, but in line with other years such as 11/12, 12/13, and 13/14. In the modern era, the high was 68.3% in 10/11, and the low was 48% in 02/03, 06/07 and 07/08.

Varner View

The best news of the year, and the worst market performance of the year. This reversal of sorts comes as rumors keep popping up, that some of the cotton China has bought in recent weeks is merchant-to-merchant, and for spec purposes only. No way to know if that is true, but todays action certainly has to be ugly after some magnificent sales. The last time sales were this good was Jan 2015. The month of March has quite a history with major events, most of those being highs. Table below shows each event since 1995, and the count is 7 major market highs in 22 years. There were 3 intermediate highs, 4 minor highs, and 3 lows of importance. The markets flirt and reverse with 80c will be taken out if sales keep up. History says demand peaks in spring and rolls over, hence a lot of highs are made in March.


Technicals

Todays reversal was the most impressive of a slew of them since Sep. Was today the final Big Banana? A couple Fib counts hit on Friday, and the one year anniversary of the major spot low falls on next Friday. The table below indicates the month of March is full of tops, and a reliable seasonal calls for a high on average date 3/10. May and July have made 5 Point Tops (not to be confused with Elliott 5 waves), and we will write more on this tomorrow.

March 2 Have A Great Day
Cotton TradersTrade With VB!

We clear and execute futures and options transactions for the cotton and fund industry at very competitive rates. Interested in setting up an account to trade or execute with us? Call our office manager today to discuss!

800-4-VARNER

(662)846-6636

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Varner Brokerage, Inc. accepts no liability for any direct, indirect, incidental, or consequential damages or losses arising from the use of this report or its content. This report is not to be construed as providing investment services in any jurisdiction where the provision of such services would be illegal.

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