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

    AgFax Grain Review: China Approves Syngenta Corn; Turkey Bans U.S. DDG Imports12-19

    Rose on Cotton: Consider Selling Remaining Spot Cotton12-19

    Livestock: USDA Drops Checkoff Plan Following Appropriations Bill12-19

    Georgia Farmer Sets New World-Record Corn Yield – DTN12-19

    Grain TV: Basis Levels Lower at Many Crushing Plants12-19

    DTN Livestock Close: Cattle Futures Rebound With Triple-Digit Gains12-19

    Doane Cotton Close: Another Choppy Week Ends Slightly Ahead12-19

    Arkansas: State Plant Board Approves Enlist Duo, Dicamba Weed Control Systems12-19

    Mississippi Crop Values to Top $7B for 3rd Straight Year12-19

    AFB Grain-Soybean Close: Wheat, Soybeans Drop, Corn Mixed12-19

    AFB Cotton Close: Mixed as Futures Continue to Consolidate12-19

    AFB Rice Close: Strong Gains to End the Week12-19

    Texas Pecans: Moderate Deliveries, Good Demand12-19

    Oklahoma Pecans: Moderate Early Deliveries Taper Off12-19

    Cleveland on Cotton: India Stirs the Bears; China Releases Reliable Stock Estimates12-19

    Western Region Pecans: Buying Interest Good, Moderate Deliveries12-19

    Georgia Pecans: Increased Deliveries, Smaller Lots12-19

    Alfalfa: Dupont Pioneer Sells Alfalfa Seed Biz To S&W12-19

    Texas Ag Benefits from Normalized U.S.-Cuba Relations, Says Expert12-19

    Brazil Livestock: Small Scale Ranchers Account for Most Deforestation – DTN12-19

    DTN Cotton Close: Narrowly Mixed on Light Volume12-19

    USDA: Peanut Price Highlights12-19

    AgFax Peanut Review: Spray Fungicides at Night; New Peanut Butter and Chocolate Ice Cream12-19

    DTN Grain Close: Wheat Pulls Back As Ruble, Oil Rally12-19

    Mississippi Soybeans: Record Yield Valued at $1.17B12-19

    DTN Livestock Midday: Feeder Cattle Post Strong Gains12-19

    DTN Grain Midday: All 3 Markets Trading Lower12-19

    Weekly Cotton Market Review12-19

    Mississippi Outdoors: Feeding Wildlife in Winter Can Cause Problems12-19

    DTN Cotton Open: Ticks Quietly Just Below Unchanged12-19

    AgFax Wildlife Review: Oklahoma Man Faces Felonies Over Wild Hogs12-19

    DTN Livestock Open: Futures to Begin Solidly Higher12-19

    DTN Grain Open: Wheat Futures Plummet12-19

    Keith Good: New Cuba Policy Could Open Huge Market for U.S. Wheat12-19

    DTN Livestock Close: Cattle Futures Pull Out of Price Collapse12-18

    Nitrogen Fertilizer: Oversupply, Geopolitical Risk Overshadow Strong Global Demand – DTN12-18

    China Holds Grain Import Quotas Steady, Revises Application Process – DTN12-18

    Doane Cotton Close: Choppy Sideways Action Continues12-18

    Chumrau on Wheat: USDA Raises World Estimates, No Comment on Russian Rumors12-18

    Georgia: 2015 Ag Forecast Meetings in Mid-January12-18

    John Deere Sells Crop Insurance Arm To Farmers Mutual Hail12-18

    Japan Elections Won’t Soften Trade Issues — DTN12-18

    U.S. Grain Transportation: Rail Shipments Make Big Jump12-18

    DuPont Pioneer Rolls Out New Soybean And Corn Selections For 201512-18

    Updated ARC-CO and PLC Payment Indicator for 2014 Crop Year12-18

    Livestock: Sharp Cattle Declines as Inscrutable as the Grinch – DTN12-18

    U.S. Drought Outlook: Improvement Expected Across California12-18

    Ag Trade Should Benefit from Thaw in U.S.-Cuba Relations12-18

    U.S. Energy: Heating Oil Expenditures Expected to Drop This Winter12-18

    Gasoline Prices: Decline in All Regions12-18

    Propane Stocks: Decrease by 0.8M Barrels12-18

    Diesel Prices: Average Drops 12 Cents12-18

    Virginia Govt. Joins USDA, EPA in Fighting Nutrient Runoff – DTN12-17

    Louisiana Pecans: Deliveries Very Light, Few Improved Varieties12-17

    Tennessee: TAPA Winter Agronomic Workshop and Cotton Focus, Jackson, Feb. 11-1212-17

    Crop Insurance: Supplemental Coverage Option Unavailable When Choosing ARC Programs12-17

    Crop Insurance: Choosing Between Base Acre Allocation Alternatives12-17

    Senate Passes Tax Extenders Bill with Key Provisions for Ag — DTN12-17

    Brazil: Amazon Deforestation Issues Concern Ag Communities – DTN12-16

    DTN Fertilizer Outlook: Global Phosphorous Demand to Increase12-16

    USDA: Weekly National Peanut Prices12-16

    Buying Local Not Without Risks, Study Finds12-16

    U.S. Ag in Strong Position with High Avian Flu Risks Elsewhere in ’1512-16

    Grain Markets: 50-Day Moving Average Never Out of Style — DTN12-16

    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