China is clamping down on import licenses in order to force domestic mills to start spinning gigantic domestic reserves, poor quality or not.

Though export sales YTD are strong, even better than they need to be to warrant USDAΆs current forecast, we have to remember thatΆs partly because some undelivered sales of 2013/14 season that ended July 31 were rolled into this yearΆs totals for a “head start” you might say.

And now, this bearish news about China clamping down on imported cotton, has many analysts dubious that the 10 million bale export forecast, which 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 October WASDE.

In todayΆs crop conditon and crop progress report from NASS, harvest is put at 8%, down 1 pt from the 5-year average but 3 pts ahead of last year. Furtherest along is Texas at 16%, 3 pts ahead of normal for this week. But Texas has been getting some very heavy rains that are not good for quality in ready-to-harvest cotton to say the least. The best you can say for it is that itΆs recharging soil moisture for next yearΆs crop. Furtherest behind is Louisiana at just 12% harvested vs. 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 mark before registering harvest lows.