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

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

    DTN Grain Close: Bean Complex Rallies, Grains Follow11-25

    USDA: Weekly National Peanut Prices11-25

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

    AgFax Rice Review: Iraq Resumes U.S. Purchases; Cambodia Wins Best Rice Award11-25

    DTN Livestock Midday: Cattle Futures Hold Sharp Losses11-25

    Winter Weather Creates More Problems for Railroads — DTN11-25

    Future of Cellulosic Biofuels in U.S. Questioned — DTN11-25

    DTN Grain Midday: Soybeans Lead Trade Higher11-25

    AgFax Peanut Review: Growers Urged to Plant Earlier; Texoma Sells Drying Facility11-25

    DTN Cotton Open: Futures Edge Slightly Higher11-25

    DTN Livestock Open: Cattle Paper to Bounce Higher11-25

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

    DTN Grain Open: Markets Start Out Mixed11-25

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

    Grain TV: Strong Demand Unable to Boost Soybeans11-24

    DTN Livestock Close: Cattle Futures Hit Reverse, End Lower11-24

    Welch on Wheat: Crop Condition Down Slightly11-24

    AFB Grain-Soybean Close: Corn Under Pressure Again11-24

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

    AFB Rice Close: Futures Turn Lower11-24

    Welch on Grain: Snow Keeps 770M Bushels of Corn in Field11-24

    Doane Cotton Close: Another Down Day11-24

    DTN Cotton Close: Finishes Just Above Contract Low11-24

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

    Livestock: Hog and Pork Prices Return to Reality11-24

    Corn: Breaking Down Stalks Takes Thought, Planning — DTN11-24

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

    Brazil Soybeans: Dry Conditions Still Cause for Concern11-24

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

    Midwest Corn And Soybean Yields – Our Readers’ Reports – AgFax11-22

    Rice Comment: The Case for Neonicotinoid Seed Treatment11-22

    U.S. Rice: Rain Stalls Texas 2nd Crop Harvest; Crop Sales Continue11-22

    Rice Market: Sale to Iraq Moves the Market11-22

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

    Grain Drying: 6 Questions About Effects Of Sudden Drop In Temps11-21

    Is Your Lifestyle Costing You the Farm?11-21

    Farmers Storing Grain Need to Weigh Risk Management Factors – DTN11-21

    Peanut Harvest Updates From Southeast, Delta And Southwest – AgFax11-21

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

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

    USDA: Peanut Price Highlights11-21

    Oklahoma Pecans: Deliveries Remain Light11-21

    Georgia Pecans: Buying Interest Very Active11-21

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

    Cotton Market Weekly Review by Region11-21

    Arkansas Cattle: Ranchers Should be Alert to Acorn Poisoning11-21

    Economist: Livestock Industry Will Have Strong Rebound11-21

    DTN Dried Distillers Grain: Cheaper Feed Source for Beef Producers?11-21

    Mississippi Outdoors: Common Deer Parasites Do Not Affect Venison11-21

    AgFax Wildlife Review: New E-Book Offers Tips for Gardening in South11-21

    Weather Challenges Florida and Iowa Farms — DTN11-21

    Vilsack: Immigration Order Creates ‘Stability’ in Ag Work Force — DTN11-21

    Texas Cotton Harvest – Still Some To Go – AgFax11-20

    Mississippi: Water Conservation Summit, Stoneville, Dec. 1011-20

    Farm Internet Service Still Slow or Non-Existent, But Improving – DTN11-20

    Yield: Important Factor in Your Irrevocable Farm Program Choice11-20

    U.S. Grain Transportation: Weekly Inspections Reach Record11-20

    U.S. Drought Outlook: Improvements Expected for California, Southwest11-20

    U.S. Energy: Planned Refinery Maintenance Light in 201411-20

    Propane Stocks: Post Slight Increase11-20

    Gasoline Prices: Decrease by 5 Cents11-20

    Diesel Prices: Average Drops 2 Cents11-20

    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