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

    USDA Commentary: Weekly Cotton Markets, Weather by Region7-25

    Rose on Cotton: No Pleasure in this Market Made for Bears7-25

    Georgia Cotton: Aphids Down, Plant Bugs Still Around7-25

    Doane Cotton Close: Futures Continue Lower After Midweek Rally7-25

    South Carolina Cotton, Soybeans: Insects on the Rise7-25

    Mississippi Cotton: Transform Efficacy on Aphids Decreases with Cool Temps7-25

    AFB Cotton Close: Sell-Off Continues7-25

    DTN Cotton Close: Settles on New Contract Lows7-25

    Arkansas: New iPhone App Simplifies Farmers’ Finances7-25

    Shurley on Cotton: Prices Try to Stabilize, Still Show Weakness7-25

    DTN Cotton Open: Extends Losses in Early Going7-25

    Keith Good: Declining Commodity Prices Foreshadow Ag Slump? Maybe.7-25

    Georgia: Corn Earworm, Tobacco Budworm Moth Captures Increasing In Brooks County7-25

    Doane Cotton Close: Prices Break Out of Range Lower7-24

    AFB Cotton Close: Breaks Support with Sharp Losses7-24

    DTN Cotton Close: Plunges to new Contract Low7-24

    Georgia Cotton: Tarnished Plant Bug Numbers Higher Than Normal7-24

    DTN Cotton Open: Trades with Modest Losses7-24

    U.S. Energy: Refineries Running at Record Levels7-24

    Gasoline Prices: Show 4-Cent Decrease7-24

    Propane Stocks: Continue to Rise7-24

    Diesel Prices: Average Declines by 3 Cents7-24

    Keith Good: House Ag Committee Chair Prods USDA on Crop Insurance7-24

    Doane Cotton Close: Prices Mixed in Light Trade7-23

    AFB Cotton Close: Dec. Continues Slight Gains7-23

    10 Arkansas and 2 Tennessee Counties Designated Natural Disaster Areas7-23

    DTN Cotton Close: Slight Gains in Dec.7-23

    Drones Monitoring the Garden or Your Crop? One Is Legal, One Is Not.7-23

    Virginia Cotton: Time to be Concerned about Stink Bugs7-23

    Cotton In The Midsouth – Plant Bugs Persist As Bollworms Arrive – AgFax7-23

    DTN Cotton Open: Ticks Higher in Quiet Dealings7-23

    Cotton – Plant Bugs, Stink Bugs Overlapping In Parts Of Southeast – AgFax7-23

    California Cotton: Flea Beetle Numbers on Rise7-23

    North Carolina Cotton: Scouting for Boll Injury from Stink Bugs7-23

    Keith Good: EPA Rejects Milo-Pro Herbicide for Use in Texas Cotton7-23

    Cotton in Southwest: Blooms Spreading; Fleahopper, White Fly on the Move7-22

    Doane Cotton Close: ICAC Releases Supply and Demand Forecasts7-22

    AFB Cotton Close: Moves Higher on Continued Consolidation7-22

    DTN Cotton Close: Settles with Modest Gains7-22

    USDA: Don’t Forget Farm Bill Conservation Compliance Changes7-22