Agfax Buzz:
    April 12, 2012

    Doane Cotton Close: Market Makes Higher Finish

    AgFax.Com - Your Online Ag News Source

    The Doane Cotton Commentary - Leading in Agricultural Analysis Over 70 Years - Copyright

    The cotton market closed higher Thursday, with new-crop contracts recovering from morning losses. May was up 162 points finishing at 93.00 cents and December was 119 points higher at88.30 cents.

    Cotton is managing a valiant recovery in the old-crop contracts thanks to the bullish export figure in USDA’s April Supply/Demand report. Futures are moving into the mid-90s, and look to challenge a move higher still. New-crop contracts have been mostly lower the past few days, but bounced today after dropping to a fresh 3-month low. The new-crop bounce was mostly technical, though the solidly higher soybean market did lend some support.

    The weekly export sales report was a bit disappointing, though with large shipments and accumulated sales already totaling the 11.4 million bale export estimate, this was not a big concern. Shipments were still solid at a little over 200,000 running bales. Though down from recent weeks, this will still easily meet USDA’s forecast. Weekly sales were a net negative 53,600 running bales due to cancellations from China, Indonesia and Guatemala.

    Tuesday’s monthly Supply/Demand report from USDA was mixed for cotton, with U.S. fundamentals bullish while the world data were a bit bearish. USDA cut the U.S. yield for 2011 to 766 lbs/acr, down from 772 lbs/acr. This dropped production from 15.67 million bales to 15.56 million, which was in line with trade expectations. Exports were raised a huge 400,000 bales, putting them at 11.4 million. The weekly export reports have shown shipments maintaining a strong pace since late January, which has indicated that the export forecast would likely be increased. Hence, this was not a huge surprise for the adjustment to be made, but it was a bit more than was expected at this point in the marketing year, given USDA’s tendency to be slow in making such adjustments. The cut in production and increase in exports decreased ending stocks by a huge 500,000 bales to 3.4 million. This would typically be quite bullish, but given the burdensome world stocks, which were increased even further in this report, the impact is muted.

    On the world level 2011/12 ending stocks were raised 3.75 million bales to 66.07 million. Ending stocks for 11/12 have been increased every month since September when they were estimated at 51.91 million bales. That puts cotton stocks 14.16 million bales higher than we were expecting 7 months ago. In September 2011 July cotton futures were trading in the mid to upper 90-cent range, whereas now they are trading in the upper 80-cent range. The growing stocks have mostly been due to cuts in the consumption forecast. However, today’s jump was largely attributable to a boost in 11/12 beginning stocks, as India’s “loss” category is now pegged at -1.75 million bales for both 09/10 and 10/11.

    India has said that they do not plan to issue new cotton export permits. They are reportedly going to ship 1.5 million bales of cotton. The international cotton market is very frustrated with India, feeling that India has compromised its integrity. India went through a time of export uncertainty last year, and now doing this again will likely keep a black mark on them for a while as being unreliable. The cotton industry seems to have mostly factored India’s uncertainty in, as the lack of future exports did not have a heavy market impact.

    Monday’s Crop Progress report showed 9% of the cotton crop planted so far. This compares to 7% a year ago and the 5-year average of 6%.

    Copyright , Doane Advisory Services

    >

    Agfax Cotton News

    AgFax Cotton Review: Australia Looking for Cotton Pickers; India Sells from State Stocks4-17

    Florida Cotton: Rain Delays; Limited Supply of New Seed ReleaseS4-17

    Cleveland on Cotton: Trading Range Stretching Topside; MidSouth Water Logged4-17

    Rose on Cotton: Spring Rally Coming. Are You Ready?4-17

    Old World Bollworm Arrival Eminent: USDA Invests $1.2M in Detection, Control – DTN4-17

    AFB Cotton Close: Dec. Falls Below Support4-17

    DTN Cotton Close: China Discusses Disposal of Reserve Stocks4-17

    How Will China’s Investments in Agriculture Affect U.S. Producers?4-17

    Conservation Compliance: 5 Steps Needed Before June 1 Deadline4-17

    Georgia Cotton: No Counter 20G Approval for 20154-17

    Weekly Cotton Market Review – USDA4-17

    DTN Cotton Open: Global Stocks Fall4-17

    Mississippi Corn, Soybeans: Slugs Appearing in Emerging Fields4-16

    DTN Cotton Close: Short Covering Allows Late Rally4-16

    AFB Cotton Close: Sluggish Demand, Improved Weather4-16

    USDA Reminds Farmers to Certify Conservation Compliance by June 1 Deadline4-16

    South Carolina Cotton: Counter 20G Not Approved for 20154-16

    U.S. Drought Outlook: Improvements Expected Across the Plains4-16

    Drought Monitor: Mississippi River, Gulf Coast Get Drenched4-16

    U.S. Drought Monitor Quick Look Video – AgFax4-16

    Texas Fertilizer Fire, 2013: What Did We Learn? – DTN4-16

    DTN Cotton Open: Contracts Break from Higher Trade4-16

    AFB Cotton Close: Pressured by Improving Weather4-15

    Propane Stocks Continue Climb4-15

    Gasoline: Strong Regional Price Movements4-15

    Diesel Prices Move Lower4-15

    DTN Cotton Close: Commercial Selling in Quiet Trade4-15

    5 Business Practices to Take Home From Ethiopian Farmers – DTN4-15

    Texas: 6 Counties Declared Natural Disaster Areas4-15

    Kansas: 2 Counties Designated Natural Disaster Areas4-15

    North Carolina: Test Soil Now to Avoid New Peak-Season Testing Fee4-15

    Arkansas Cotton: Pre-Plant, Pre-Emerge Applications for Brake F24-15

    DTN Cotton Open: Light Support Tied to China4-15

    AgFax Editor and Photographer’s Work on the Road and the Web4-14

    DTN Cotton Close: Pressure from Noncommercial Selling4-14

    USDA Launches Website For New and Beginning Farmers4-14

    AFB Cotton Close: Beneficial Rains Drag on Prices4-14

    Oil Crops Outlook: U.S. Soybean Stocks Worked Down by Record Demand4-14

    Texas Crop Weather: Cotton Planting a Week to 10 Days Behind4-14

    Tennessee Cotton: Late Burndown Options4-14