Rain forecast for Texas is a wildcard. If they fall as forecast, it will be very welcome for the crop but somewhat bearish for prices on top of the bearish USDA reports released last Thursday.

Chine remains the big wildcard, however. The ace. There is still no “official” confirmation of what we first reported last month; that Beijing is considering a radical change in their domestic support for cotton farmers, which would be adoptiong direct subsidies similar to the U.S. target price and deficiency payment system instead of buying up cotton and socking it into reserves which already total a whopping 14-month supply of ChinaΆs annual consumption.

This afternoonΆs crop progress report showed condition ratings slipped a bit in the most recent week, to 42% of the crop rated good to excellent compared to 44% a week ago and 45% a year ago. Even more noteworthy, the portion of the crop rated poor to very poor grew by 2 points as well in the most recent week, to 26% from 24% a week ago and 18% a year ago.

This tells me the forecast rains for Texas are vital and not a luxury. TodayΆs market action supports that view, rebounding at least some after last weekΆs big post-report tumble.