YesterdayΆs bearish news about China clamping down on imports really has bulls on the run. There seems to be a growing consensus that China is going to start operating under government warehouse licenses in order to force domestic mills to start spinning gigantic domestic reserves, poor quality or not.

Though export sales YTD are strong, better than needed to meet USDAΆs current forecast, we have to remember that is partly because some undelivered sales from the 2013/14 season – which ended July 31 – were rolled into this yearΆs totals for a “head start”.

And now this bearish news from China has many analysts dubious that the 10 million bale export forecast, which already dropped from 10.7 million in the August WASDE report, will hold up. Yes, there is now substantial cause for USDA to cut that forecast again in the upcoming October WASDE.

In yesterdayΆs crop condition and crop progress report from the NASS harvest was put at 8%, down 1 pt from the 5-year average but 3 pts ahead of last year. Furthest along is Texas at 16%, 3 pts ahead of normal for this week. But Texas has been getting some very heavy rains which are not good for quality in ready-to-harvest cotton. The best you can say is that the rains are recharging soil moisture for next yearΆs crop.

Furthest behind is Louisiana at just 12% harvested vs. a normal of 33%.

As for crop ratings on cotton still in the field, 48% is rated good to excellent, down a point from last week but still ahead of last year at 44%. The portion of the crop rated poor to very poor was unchanged from last week at 18% and still better than last year when the figure was 23% poor to very poor.

Prices are back to 5-year lows and the news from China tells us futures may indeed dip under the 60 cent mark before registering harvest lows.