Agfax Buzz:
    May 3, 2012
    400pxcotton_bolls_mature_040928_077

    Doane Cotton Close: Rumors of Chinese Buying Lifted New Crop Futures

    AgFax.Com - Your Online Ag News Source

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

    The cotton market finished lower on Thursday. Futures spent the majority of the session lower, but a midday rally in the December almost turned prices back positive. July settled 30 points lower at 89.21 cents and December was down 6 points at 86.52 cents.Talk of Chinese buying picking back up helped lift new-crop futures late in the session. The trade seems to feel that U.S. prices are cheap enough to attract buying, as China will prefer to source from the U.S. at these levels. Thursday’s export report was mixed for cotton. Upland sales were negative 25,226 running bales due to cancellations from China and Indonesia. Pima sales were positive, however, at 11,032 running bales.

    Total shipments were a strong 336,373 running bales. Total shipments so far are 8.43 million bales, compared to USDA’s estimate of 11.4 million. Combined with outstanding sales of 3.65 million bales this puts the total at 12.08 million bales. There are typically some bales carried over at the end of the marketing year, but there is still some cushion right now where the cancellations are not a threat to reducing the export estimate. Adding to the bearishness are increasing rain forecasts for west Texas. Texas has been under drought conditions for well over a year, which led to record abandonment and low yields in 2011. South and central Texas has gotten good rains the past month, but west Texas and the panhandle are still under severe to extreme drought.

     

    Midday forecasts today greatly increased the amount of rain expected for Texas next week, calling for 2.0 to 3.0 inches in west Texas and as much as 4.0 inches in concentrated areas. Hot temperatures have mitigated the relief of recent rains, as evaporation rates are high, but this heavy of a rain should help improve soil moisture considerably, especially if it comes at a slow rate.News on Monday that India would reopen its export market sent old crop prices sharply lower. July fell to a 2-week low on Monday before losses were trimmed, while December fell to a 4-month low. Today July bounced up a little more as most likely viewed the sell-off as overdone given India’s unpredictability. December was kept in check by the good rains that have been helping replenish very depleted soil moisture levels in Texas. Adding to new-crop pressure was Monday’s good Crop Progress report.

    On Monday India announced that they were lifting their ban on cotton exports. India initiated the ban unexpectedly in early March, sending prices up the limit. Since then there have been a number of adjustments made that have kept the market guessing, but have also seemed to compromise India’s reliability in the eyes of those in the cotton market. At one point it sounded as if India will be allowing a set number of exports, with 1.5 million to 2.0 million bales mentioned, while others indicate the lift on the ban is indefinite. Additional cotton available for export is bearish for the U.S. as a competitor, but India’s loss of stature as a reliable exporter will be in the back of buyers’ minds and will likely limit the impact of the ban being lifted.

    Monday’s Crop Progress report showed cotton planting still well ahead of normal, with 26% planted versus last year’s 16% and the 5-year average of 19%. Texas was slowed down a little by rains last week, though no one would begin to complain about rain in Texas at this point! Texas is 25% planted, up just 2% from the previous week. Georgia, the next biggest production state, is 23% planted versus the 5-year average of 9%.

     

    Copyright , Doane Advisory Services

    >

    Agfax Cotton News

    Keith Good: Federal Reserve Beige Book Released – Ag Economy Observations3-4

    Doane Cotton Close: Acreage May Not Drop, Market Turns Negative3-4

    Kansas: Sumner County a Primary Natural Disaster Area3-4

    Arizona: 4 Counties Declared Natural Disaster Areas3-4

    Oil Exports Reach Record High3-4

    New Mexico: 9 Counties Designated Natural Disaster Areas3-4

    California: Imperial County Designated a Natural Disaster Area3-4

    DTN Cotton Close: Record High Ending Stocks Outside China3-4

    Propane Stocks Decrease3-4

    Gas Prices Skyrocket3-4

    Diesel Prices on the Rise3-4

    Tennessee: Almost Time for Burndown Applications3-4

    DTN Cotton Open: Sales Dip, All Eyes on China3-4

    Doane Cotton Close: Lower Global Demand Expectations3-3

    New Videos Shows Weeds Time-Lapsed Reaction to Herbicides3-3

    DTN Fertilizer Trends: Northern Farmers Glad for Lack of Delays3-3

    Texas: Drought Outlook Is Positive for Next 2 Decades3-3

    DTN Cotton Close: India Sales Insignificant3-3

    North Carolina: Farming on Leased Land Workshop, Mills River, April 93-3

    Cotton: Topguard Gets Full Registration, Pay Attention to Use Rates3-3

    DTN Cotton Open: Coils Quietly Near Lows3-3

    Fertilizer Management: Watch Out for Burns from In-Furrow Starters – DTN3-2

    Keith Good: Ethanol Profits; California Rains – Just Drop in the Drought Bucket3-2

    Herbicide-Resistance: 12 Steps to Keep Weeds Away3-2

    AFB Cotton Close: Slightly Mixed3-2

    Doane Cotton Close: Market Follows Stock Exchange3-2

    DTN Cotton Close: Winter Weather Impedes Field Work3-2

    DTN Fertilizer Outlook: Harsh Winter to Keep Prices Flat3-2

    Texas Cotton: Root-Knot Nematodes – Resistant Varieties, Early Season Management3-2

    DTN Cotton Open: Cash Grower Sales Slump3-2

    Keith Good: Crop Insurance Guarantees to Fall; California Drought “Catastrophic”;3-2

    Rose on Cotton: Gin Show Visit – High Quality Cotton Still in Demand2-28

    AFB Cotton Close: Selling Continues with Wide Range2-27

    Doane Cotton Close: Technical Selling, Profit-Taking Weigh on Market2-27

    Cotton Base Acres Count as Generic Base Under Farm Bill2-27

    DTN Cotton Close: Texas Could See More Freezing Rain, Snow2-27

    Shurley on Cotton: Improvement Slows Down, but What Else Did We Expect?2-27

    Weekly Cotton Market Review – USDA2-27

    Arkansas Cotton: Acreage, Infrastructure Slip Away with Weaker Demand2-27

    Keith Good: Chinese Corn Imports Not Likely to Recover; Food Stamp Debate Rages On2-27