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Events

  1. Kansas: K-State Program to Help Farmers Deal with Historic Ag Downturn

    December 7, 2016 @ 8:00 am - February 15, 2017 @ 5:00 pm
  2. Louisiana: LSU Rice Clinics Scheduled Jan. 5 to Feb. 8 in 6 Locations

    December 20, 2016 @ 8:00 am - February 9, 2017 @ 5:00 pm
  3. South Carolina: 4 Upcoming Forest Management Workshops for Woodland Owners

    January 12 @ 8:00 am - February 10 @ 5:00 pm
  4. Minnesota: Weed Resistance Workshops for Jan., Feb.

    January 13 @ 8:00 am - February 24 @ 5:00 pm
  5. Louisiana: LSU Offers 3 Irrigation Workshops in Jan., Feb.

    January 17 @ 8:00 am - February 14 @ 5:00 pm
  6. Illinois: 4 Regional Crop Management Conferences in Jan., Feb.

    January 18 @ 8:00 am - February 15 @ 5:00 pm
  7. Georgia Ag Forecast Series Scheduled Jan. 18-27

    January 18 @ 8:00 am - January 27 @ 5:00 pm
  8. Texas Farm Workshop: Vets, Active Duty Military and Beginners, Overton, Jan. 21

    January 21 @ 8:00 am - January 22 @ 5:00 pm
  9. Agronomy Essentials Workshop – Salina, Kansas, January 23

    January 23 @ 8:00 am - 5:00 pm
  10. Texas: Pecan Short Course, College Station, Jan 23-26

    January 23 @ 8:00 am - January 26 @ 5:00 pm
  11. Missouri: 9 ‘Grow Your Farm’ Sessions from Jan. – March

    January 23 @ 8:00 am - March 11 @ 5:00 pm
  12. Texas: Red River Crops Conference, Childress Jan. 24-25

    January 24 @ 8:00 am - January 25 @ 5:00 pm
  13. South Carolina: Cotton, Peanut Grower Meetings, Sentee, Jan. 24, 26

    January 24 @ 8:00 am - January 26 @ 5:00 pm
  14. Missouri: 4 Farm Retirement, Succession, Estate Planning Workshops in Jan., Feb.

    January 24 @ 8:00 am - February 14 @ 5:00 pm
  15. Arkansas Soil & Water Education Conference, Jonesboro, Jan. 25

    January 25 @ 8:00 am - 5:00 pm
  16. Georgia: Cotton Production Workshop, Tifton, Jan. 25

    January 25 @ 8:00 am - 5:00 pm
  17. Texas: Feed Grains Marketing Workshop, Amarillo, Jan. 25-26

    January 25 @ 8:00 am - January 26 @ 5:00 pm
  18. Virginia Eastern Shore Ag Conference and Trade Show, Melfa, Jan. 25-27

    January 25 @ 8:00 am - January 27 @ 5:00 pm
  19. Louisiana: Conservation Program Workshop, West Monroe, Jan. 25

    January 25 @ 8:00 am - 5:00 pm
  20. Middle Tennessee Grain Conference, Manchester, Jan. 26

    January 26 @ 8:00 am - 5:00 pm
  21. Texas: Pesticide Applicator Course, Harleton, Jan. 26

    January 26 @ 8:00 am - 5:00 pm
  22. Texas: Feral Hog Program, Falfurrias, Jan. 26

    January 26 @ 8:00 am - 5:00 pm
  23. Nebraska Livestock: 8 Nutrient Management Workshops in Jan. and Feb.

    January 26 @ 8:00 am - February 7 @ 5:00 pm
  24. Texas: Llano Estacado Cotton Conference, Muleshoe, Jan. 30

    January 30 @ 8:00 am - 5:00 pm
  25. Texas: Feral Hog Management Workshop, La Vernia, Jan. 30

    January 30 @ 8:00 am - 5:00 pm
  26. Indiana: Ag Business Management Workshop, West Lafayette, Jan. 31 – Feb. 2

    January 31 @ 8:00 am - February 2 @ 5:00 pm
  27. Texas: ‘Last Chance’ CEU Training, San Angelo, Jan. 31

    January 31 @ 8:00 am - 5:00 pm
  28. California: Farm Labor Management Workshops Scheduled in February

    February 1 @ 8:00 am - February 2 @ 5:00 pm
  29. Tennessee: Grain & Soybean Producers Conference, Dyersburg, Feb. 2

    February 2 @ 8:00 am - 5:00 pm
  30. Texas: Grain Elevator Workshop, Amarillo, Feb. 2

    February 2 @ 8:00 am - 5:00 pm

Cleveland on Cotton: Weather and Water Shortages Continue to Plague 2014 Crop

Debra Ferguson
By Debra Ferguson May 2, 2014

Cotton prices settled 100 to 200 points higher on the week as bullish fundamentals continue to build and speculative funds add to their already bullish positions. As broadcast to you over the past month, the unfixed on call sales along with the severe weather affecting the world’s major producing countries have laid the groundwork for price optimism.

The potential 2014 U.S. crop, as well as the Chinese crop, is dwindling in our sight. Incredibly, the end of the marketing year unfixed July call sales are growing instead of shrinking. I do not recall any previous year when such has ever occurred, at least in an active market. Almost as incredible is a significant increase in open interest in both the old crop July and the new crop December contracts.

The demand for U.S. crop is weak owning to:  A- Most of the available supply is high micronaire and/or barky,  and B- foreign grown cotton, while still above 90 cents, is 3  to 5 cents less than the price of U.S. growths. Demand for high quality U.S. cotton continues strong, but is in extremely limited supply.  Additionally, the potential for a weather reduced 2014 crop is only adding more value to little old crop that has not been sold. Little to no physical demand exists with July futures above 96 cents, but the aforementioned factors could push July to that magic $1 level before all is said and done.  The demand for physical cotton does not justify $1; however, the demand for pricing the unseasonably large number of on call sales that must be fixed (priced by buying futures) absolutely no later than some 35 trading sessions from now can easily justify that magic price level. Take note: there are 35 trading days until first notice day on the July contract.

Photo: Debra L Ferguson

Photo: Debra L Ferguson

The new crop December has held above 82-83 cents with ease and has all but breached its 85-86 cent resistance point. December could add another nickel in the absence of a Memorial Day/first week of June rain in the Southwest. Small pockets of the Rolling Plains have had some beneficial moisture, but the vast acreage of the High Plains Districts 1-N and 1-S remains totally dry–the third driest in at least 50-70 years. Yet, a soaking rain by the first week of June would take up to 300 points out of the market, but it would only represent a one month band aid before needing major attention again.

The combination of these factors will likely make for extreme price volatility in the July contract. Likewise, some of that volatility should also surface in the December contract. Of course, the July contract will be more price sensitive to weather in the Southwest. Yet, the water logged b and Southeast are also on the radar as well. The old adage for those crops is that they “always get in.”  Yes, they do, but it is time to dry out as planting is already delayed in both regions. The high yielding California crop has, for the most part, either switched to Pima or lost to Upland this year due to the sharp reduction in water allocation for irrigation. The northern region of China’s cotton Belt continues with its weekly freezing rain and snow. Thus, the 2014 Chinese production can now be some 25% percent below its 2013 crop…and all of a sudden the massive level of Chinese stocks is not so massive any more. Too, China’s goal is to continue reducing cotton plantings in favor of food/feed grains and remain a net importer of cotton.

Export sales are shrinking given the market is at 95 cents and above. Yet, export commitments stand at 89 percent of USDA’s annual projection. This is identical to the five year average for the same week in time. July could get wild…trading a ten cent range from 90 to 100 cents…December will make a run to 86 cents and try for more.

Debra Ferguson
By Debra Ferguson May 2, 2014