Friday, June 28, 2013
oa-cleveland-mississippi-05182012

Cleveland on Cotton: High Range Possible – SW Drought Plus Low International Stocks

AgFax.Com - Your Online Ag News Source


Cotton prices shifted to reverse this week as international weather factors made their presence known. The Southwest U.S. drought continued to spread as rapidly as crop insurance adjustors made their way through cotton fields in that region. The Delta and Southeast made solid progress as did the big crops in India and China.

The Indian monsoon has been as positive as the Southwest U.S. drought has been devastating. Other fundamentals were sprinkled throughout the market including fresh demand at the week’s low price activity, the USDA June planted acres report and the weekly export report. Technically, the market has moved to a sideways pattern shifting from the 86-89 cent highs to the 82-83 cent lows. The 82 cent support has continued to justify the hype of its rock solid support. Too, fresh demand all but absolutely disappears on any price move up to 88 cents.

This frames the world cotton picture moving into July. However, the recently 500-600 point weekly swings will be typical over this time period as an abnormally large amount of the cotton open interest is concentrated in the December contract. Nevertheless, it is noticed that the A Index fell to only some 92.50 cents this week compared to drops to 90-91 cents during similar periods of the past months.

It is very possible that the market is attempting to work out of this sideways range to a higher range. I vote for a higher range, but others are simply indicating that either a higher or lower range is coming, commenting that technicals suggest that “something must give.”  Yet, I would be remiss if I did not say that my idea of a higher range is based on crop problems in the U.S. and the continuing decline in international stocks of cotton held outside of China. The little available high quality cotton outside of China is rapidly being depleted and this is supportive of higher New York futures as well as a higher A-Index.

The weekly export sales of Upland was seasonably low coming in at only a net of 57,000 RB for the 2012-13 marketing year. Yet, those sales were associated with the run of December back to 89 cents. More problematic however, 2013-14 sales of Upland were a net negative 7,100 RB, the first week in months of negative sales.

Likewise, for the first time in weeks, shipments were less than expected. Shipments fell sharply to 130,500 running bales of Upland and 18,800 of Pima. Total shipments have reached 12,165,227 bales. The shipment level fell below the average needed to meet the USDA estimate. Six weeks remain in the season and shipments need to average 243,182 statistical bales to reach the USDA estimate. I have been expecting shipments to run some 100,000 bales ahead of the USDA estimate, but that estimate is now in jeopardy.

Astute mills took advantage of the international currency adjustments against a strong dollar and cancelled some sales with the idea of replacing them at lower prices. However, total 2013/14 export sales have now fallen below the pace of last season with total sales of upland at 1,930,100 RB which is below the year ago levels of 2,395,900 RB.

Total 2013/14 export sales have now fallen below the pace of last season with total sales of upland at 1,930,100 running bales compared to year ago levels of 2,395,900 running bales. The recent international currency adjustments have again placed U.S. exports at a price disadvantage. The U.S. is no longer one of the less expensive crops. International mills and merchants are turning to Indian and African styles.

USDA did release its June planted acreage report on Friday and was as expected.  The report put U.S. plantings of all cotton at 10.3 million acres (10.251) including 10.025 million acres of Upland and 226,000 acres planted to Pima. Texas plantings were estimated at 5.771 million acres with Georgia plantings at 1.3 million acres, North Carolina at 420,000 acres followed by Alabama and California both with 330,000 acres. It is noted that Georgia plantings exceed those of the Midsouth.   

International currency adjustments aside the December will take another look at the high 80’s.

 


Tags: , , , ,


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    Rice Market: Technical Indicators Remain in “Sell” Mode10-24

    Rice Crop: Harvest Nearly Complete, Ratoon Harvest to Start Soon10-24

    Rose on Cotton: Increased Export Competition with India10-24

    Grain TV: Unable to Sustain Yesterday’s Gains10-24

    DTN Livestock Close: Cattle Futures Move Lower10-24

    Doane Cotton Close: Strong Stock Market Keeps Prices Up10-24

    AFB Grain-Soybean Close: Markets Decline Across the Board10-24

    AFB Cotton Close: Higher in Middle of Day’s Range10-24

    AFB Rice Close: Nearby Contracts Slightly Higher10-24

    DTN Cotton Close: Jumps Ahead as Volume Improves10-24

    DTN Grain Close: Markets Pull Back, End Week Higher10-24

    Cleveland on Cotton: Market Keeps Spinning the Same Record10-24

    USDA: Peanut Price Highlights10-24

    Georgia Pecans: Very Light Deliveries, Season Still Running Late10-24

    Soybean Cyst Nematodes: Soil Sampling, Resistant Varieties Are the Best Defense – DTN10-24

    Farm Finances: Prepare Now for Rising Interest Rates – DTN10-24

    Mississippi Pumpkins: Heavy Rains Damaged Crop, Delayed Harvest10-24

    DTN Livestock Midday: Live Cattle Futures Turn Lower10-24

    Louisiana Soybeans: Headed for Another Record Year10-24

    DTN Grain Midday: Corn, Soybeans Move Lower10-24

    Dried Distillers Grains Eyed as Fish Food — DTN10-24

    DTN Cotton Open: Slightly Higher on Light Volume10-24

    DTN Livestock Open: Cash Cattle Values Surge10-24

    DTN Grain Open: Futures Extend Gains10-24

    Keith Good: EPA’s Water Rule Approved by Internal Review Board10-24

    Grain TV: Soybean Exports Double Expectations10-23

    Livestock: Country Of Origin Labeling Debate Marches On – DTN10-23

    Small Scale Organic Farming a Good Way to Branch into Ag – DTN10-23

    U.S. Grain Transportation: Higher Soybean Shipment Boosts Inspections10-23

    Advances in Farming Technology Continue to Aid Mother Nature — DTN10-23

    Ethanol Production Profits Hit the Wall — Why Did it Happen?10-23

    U.S. Energy: Crude Exports, Re-Exports Continue to Rise10-23

    Gasoline Prices: Show 9-Cent Decrease10-23

    Propane Stocks: Increase by 0.2M Barrels10-23

    Diesel Prices: Average Drops 4 Cents10-23

    Alabama: Recent Weather Radar Oddity Was Mayfly Swarm10-22

    Soybean Harvest: Prioritize Shatter-Prone Fields – DTN10-22

    Ethanol: Court Tosses E15 Labeling Lawsuit – DTN10-22

    Georgia: 2 Counties Declared Natural Disaster Areas10-22

    Arkansas: 2 Counties Designated Natural Disaster Areas10-22

    AgFax Grain Review: More Lawsuits Against Syngenta; Harvest Well Behind Pace10-22

    2 Families, 2 Approaches to Building Ranch Tourism — DTN10-22

    Don’t Just Piggy-Back on Others’ Prices in Ag Commodity Markets10-22

    National Cotton Council Commends Timely APH Announcement10-22

    Wheat Growers to Seek Inclusion in APH Yield Exclusion for 2015 – DTN10-21

    Farm Shop Dream Requires Thoughtful Planning – DTN10-21

    USDA: Weekly National Peanut Prices10-21

    USDA to Implement APH Yield Exclusion for 2015 Spring Crops10-21

    Arkansas: USA Rice Outlook Conference Set Dec. 7-9 in Little Rock10-21

    AgFax Cotton Review: Lower Acres May Close Mill; Australia Acres Up10-21

    DTN Fertilizer Trends: High Costs May Alter Growers’ Tactics for 201510-21

    Herbicide Resistant Weed Summit’s Slides, Webcast Available Online10-20

    Rice and Sugar: Thailand’s Quest for World Domination10-20

    AgFax Peanut Review: NM Down 6M Pounds as State Celebrates 100 Year Crop10-20

    Sunbelt Ag Events

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney