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Events

  1. Illinois: Crop Management Conferences, Jan. 20 – Feb. 10

    January 20 @ 8:00 am - February 10 @ 8:00 am
  2. Texas: National Cotton Council Annual Meeting, Dallas, Feb. 5-7

    February 5 @ 8:00 am - February 7 @ 5:00 pm
  3. Texas: Wild Pig Management Workshop, Luling, Feb. 9

    February 9 @ 8:00 am - 5:00 pm
  4. Ohio: Corn College Workshop, Greenville, Feb. 10

    February 10 @ 8:00 am - 5:00 pm
  5. Arkansas State Agribusiness Conference, Jonesboro, Feb. 10

    February 10 @ 8:00 am - 5:00 pm
  6. Texas: Feed-Grain Marketing Workshop, Amarillo, Feb. 10-11

    February 10 @ 8:00 am - March 11 @ 5:00 pm
  7. West Florida Crops Meeting, Jay, February 11

    February 11 @ 7:45 am - 12:00 pm
  8. Georgia: Ag Business Planning Workshop, Glennville, Feb. 11, 18

    February 11 @ 8:00 am - February 18 @ 5:00 pm
  9. Alabama-Florida Peanut Trade Show, Dothan, February 11

    February 11 @ 8:00 am - 5:00 pm
  10. Four States Agricultural Exposition, Texarkana, Feb. 11

    February 11 @ 8:00 am - 5:00 pm
  11. Ohio: Agronomy Workshops, Wooster, Feb. 15, 16

    February 15 @ 8:00 am - February 16 @ 8:00 am
  12. Louisiana: Irrigation Management Workshop, Marksville, Feb. 16-17

    February 16 @ 8:00 am - February 17 @ 8:00 am
  13. Tennessee: Irrigation Meeting, Somerville, Feb. 16

    February 16 @ 8:00 am - 5:00 pm
  14. Tennessee: Cotton Focus Meeting, Jackson, Feb. 18

    February 18 @ 8:00 am - 5:00 pm
  15. Illinois: Ag Tech Innovation Summit, Champaign, Feb. 18

    February 18 @ 8:00 am - 5:00 pm
  16. Texas: Oil, Gas Leasing Workshop, College Station, Feb. 22

    February 22 @ 8:00 am - 5:00 pm
  17. Texas: Wild Pig Management Workshop, Burnet, Feb. 24

    February 24 @ 8:00 am - 5:00 pm
  18. Virginia: USDA Agricultural Outlook Forum, Arlington, Feb. 25-26

    February 25 @ 8:00 am - February 26 @ 5:00 pm
  19. Georgia: Pest Manager Training, Forsyth, Feb. 25

    February 25 @ 8:00 am - 5:00 pm
  20. Tennessee: Winter Row Crop Marketing Meeting, Mason, Feb. 25

    February 25 @ 8:00 am - 5:00 pm
  21. Texas: Rice Technical Working Group, Galveston, March 1-4

    March 1 @ 8:00 am - March 4 @ 8:00 am
  22. Indiana Small Farm Conference, Danville, March 4-5

    March 4 @ 8:00 am - March 5 @ 5:00 pm
  23. Kansas: 103rd Annual Cattlemen’s Day, Manhattan, March 4

    March 4 @ 8:00 am - 5:00 pm
  24. Kentucky: Integrated Pest Management Training, Princeton, March 2

    March 6 @ 8:00 am
  25. Oklahoma: Irrigation Conference, Woodward, March 8

    March 8 @ 8:00 am - 5:00 pm
  26. Oklahoma: Pecan Management Course, Stillwater, March 8

    March 8 @ 8:00 am - 5:00 pm
  27. Missouri: Free Pesticide Collection Event, Portageville, March 12

    March 12 @ 8:00 am - 5:00 pm
  28. Florida: Carinata Summit, Quincy, March 15-16

    March 15 @ 8:00 am - March 16 @ 5:00 pm

 

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Cleveland on Cotton: Growers, Watch for Your Chance at 75-76 Cent Level

Debra Ferguson
By O.A. Cleveland, Professor Emeritus, Mississippi State University November 17, 2012

Cleveland on Cotton: Growers, Watch for Your Chance at 75-76 Cent Level

Three up days, a trip to 74.50 cents, a weekly settlement of 72.73, basis December, and another week of very strong exports; just another typical week in the cotton market’s cycle…

Pushed by strong winds coming out of China and the Subcontinent this week, prices sailed higher and looked for a time as if they could take another trip above 75 cents in an attempt to test price resistance above the 77 cent mark. Yet, the ever building price resistance near 75 cents held the market in check. I would be remiss too if I failed to mention that once December stuck its head above 73 cents the “bonus” Chinese buying to fill immediate export needs quickly disappeared.

Look for the cycle to continue to punch above 75 cents only to fail, and then shortly thereafter make an attempt to break below 69 cents to continue. In fact, this will likely carry us to the new year. That is to say, 70 cents, basis the New York December is too cheap for cotton, but for now 75-77 cents is a bit pricey for now.

As mentioned last week the “bonus” Chinese buying is called such in that the sales had not been anticipated by the industry earlier in the year and all projections had Chinese imports down sharply. However, due to the Chinese’s government’s cotton policy, any dip in the New York ICE futures below 73 cents creates a situation whereby it is cheaper for Chinese mills to import U.S. cotton, pay the 1% VAT tax and the 40% non-quota tax, than to purchase either old crop or new crop cotton from the government.

Cotton export sales for the week ending 11-8-2012 were a very impressive totaling well over 400,000 RB. Net sales of Upland were 370,000 RB. Major buyers were Pakistan—121,300 RB and China—72,600 RB. Additionally, a good portion of the sales to Pakistan fall into the “bonus” category in that China, while reducing its cotton spinning (demand) it is increasing it imports of yarn imports (demand) from Pakistan. China is, and has been for a several months, importing record quantities of yarn from Pakistan. Thus, the Pakistani mills have to import cotton to meet the needs of weaving mills in China. The net effect is that U.S. cotton sales and world cotton demand is exceeding expectations and that world carryover stocks will be some 3.0 to 6.0 million bales less than currently forecast.

Nevertheless, the world remains awash with cotton and that will continue to play havoc on any attempt to move above 77 cents, or likely above 75 cents. Foreign mill margins remain strong and this continues to drive the immediate demand for cotton.

Additional support to cotton came this week from fund trading based on the cotton –soybean spread. Due to the weakness in the oilseed market, funds were very active in selling soybeans and buying cotton. That arbitrage, while very active on Wednesday and Thursday will likely dissipate quickly. It could become more active in mid-to-late 2013, but is not expected to continue at the current time.

Growers should sit on the sidelines now, but become more active in pricing cotton on any return to the 75- 76 cent level.

We will not publish next week.

Happy Thanksgiving!

Debra Ferguson
By O.A. Cleveland, Professor Emeritus, Mississippi State University November 17, 2012