A fourth straight lower close for cotton. At least todayΆs loss was relatively minor. But chart damage is bad. The biggest reason we didnΆt see aggressive follow-through selling today is that traders were evening up ahead of tomorrowΆs April WASDE report from USDA. (It will be released at 11 a.m. CDT and weΆll have initial analysis and market reaction here by about 11:30.)

Here are pre-report trade estimates:

For U.S. ending stocks, private estimates average 4.1 million bales down 100,000 from March due to recent let-up in export sales that has sales year to date slightly behind the pace they ought to be on to hit USDAΆs current forecast.

The range of estimates for U.S. ending stocks runs from 3.9 million bales to 4.3 million, however. USDA is likely to raise the size of the U.S. crop by nearly 300,000 bales because of the higher-than-expected ginnings number. And unless offset by an unexpected INCREASE in its export estimate, that would result in ending stocks at or even above the high end of the range of estimates. In short, I think the cotton market is set up for a negative reaction to the U.S. balance sheet changes from USDA tomorrow morning. Catch-up sales advised if not at recommended levels.

At the global level, the hike for the U.S. crop will likely push the global crop estimate up by at least 200,000 bales. However, USDA is also likely to boost its usage estimate a bit more than that, for a slight net decline in global ending stocks. That could well offset a negative set of numbers for the U.S. and result in little market reaction by the end of the day.

IΆm re-running last nightΆs chart because there was little change in the message with todayΆs small further loss in new crop futures: Buying interest has dried up and speculative profitaking has now broken the long-term uptrend line on the December chart AND taken out last monthΆs lows, creating what now appears to be a serious and major top.

Catch up sales STRONGLY advised.