Agfax Buzz:
    May 4, 2012

    Doane Cotton Close: The Job Market And July Buying Hit The Market Hard

    AgFax.Com - Your Online Ag News Source

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

    The cotton market ended lower on Friday, with July taking the hardest hit this week. July lost 324 points, falling to a 3-week low, while the December gave up 210 points to close at a 4 1/2 month lows. July settled 122 points lower on Friday at 87.99 cents and December was down 72 points at 85.80 cents.

    Disappointing news on the job front weighed on the market today. Data showing the number of new jobs were well below estimates, which was disappointing after March was lower than expected also. Analysts fear that jobs are slowing down to align with GDP rather than GDP picking up, according to Nigel Gault, an economist with IHS Global Insight. Cotton is in a bit of a bear market anyway, with stocks expected to increase considerably after last year’s poor crop the slowdown in consumption. However, if demand looks to be slow to recover prices will be weighed down, which could still mean less acreage planted to cotton.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%.

    Tags: ,

    Copyright , Doane Advisory Services

    >

    Agfax Cotton News

    Doane Cotton Close: Outside Strength Helps Prices Rebound11-25

    AgFax Cotton Review: New Stink Bug App; India Exports Drop11-25

    DTN Cotton Close: Higher on Light Volume11-25

    Tax Extenders Delays Bad for Economy, Says Senator – DTN11-25

    Georgia: 10 Farm Bill Meetings Scheduled for Mid Dec.11-25

    Texas Crop, Weather: Water Supply, Crop Prices Remain a Concern11-25

    Georgia Cotton: Thankfully, Harvest Almost Finished11-25

    DTN Cotton Open: Futures Edge Slightly Higher11-25

    Shurley on Cotton: New Round of Weakness Sets In11-25

    Keith Good: Farmers Care About a Labor Force, Not Politics — AFBF11-25

    Mississippi: Crops Mostly Out of Fields – USDA11-24

    Georgia: Rains and Freezing Temps – USDA11-24

    South Carolina: Harvest Wraps Up, Rains Improve Soil Moisture – USDA11-24

    Oklahoma: Harvest Moves Along – USDA11-24

    Alabama: Row Crop Harvest Nearly Done — USDA11-24

    Florida: Late Week Rains Delay Harvest – USDA11-24

    North Carolina: Sorghum Harvest Lags Behind, Cotton Nears Finish – USDA11-24

    Kansas: Soybean, Sorghum Harvests Enter Home Stretch – USDA11-24

    Virginia: Rains Help Pastures but Some Areas Remain Dry – USDA11-24

    AFB Cotton Close: Trading at 5-Year Lows11-24

    Arizona: Cotton Harvest Continues Ahead of Pace – USDA11-24

    Doane Cotton Close: Another Down Day11-24

    Texas: Snow, Rain Slow Harvest – USDA11-24

    DTN Cotton Close: Finishes Just Above Contract Low11-24

    Arkansas: Harvest Finished for All but a Few Fields – USDA11-24

    California: Cotton, Walnut Harvests Nearly Done – USDA11-24

    Missouri: Harvest Wraps Up – USDA11-24

    Farmland Partners Buys 7 South Carolina Farms for $28M11-24

    DTN Fertilizer Outlook: Winter’s Arrival May Delay Some Buying11-24

    DTN Cotton Open: Trades Down Slightly within Tiny Spans11-24

    Arkansas: Rice, Cotton Yields Get Boost from Weather11-24

    Flint on Crops: Low Input Farming May be Necessary in 201511-24

    Keith Good: EPA Decision on Renewable Fuels Mandate Delayed to 201511-24

    Rose on Cotton: Looking for the Positives This Week11-21

    Cleveland on Cotton: 57 Cents – ‘The Bottom is In’11-21

    Ag Labor: Immigration Order Provides Little Long-Term Benefit – DTN11-21

    Doane Cotton Close: Decline in Chinese Production Offers Support11-21

    AFB Cotton Close: Futures Rebound11-21

    DTN Cotton Close: Settles Higher on Light Volume11-21

    Ag Policy: Farm Bills Need Long-Term View11-21