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Events

  1. Texas: Randall County Crops Tour, Canyon, Aug. 30

    August 30 @ 8:00 am - 5:00 pm
  2. Louisiana: Sweet Potato Field Day, Chase, Aug. 31

    August 31 @ 8:00 am - 5:00 pm
  3. California: Rice Field Day, Biggs, Aug. 31

    August 31 @ 8:00 am - 5:00 pm
  4. Georgia: Cotton/Peanut Research Field Day, Tifton, Sept. 7

    September 7 @ 8:00 am - 5:00 pm
  5. Tennessee: Cotton Tour Field Day, Jackson, Sept. 7

    September 7 @ 8:00 am - 5:00 pm
  6. Georgia Peanut Tour, Tifton, Sept. 13-15

    September 13 @ 8:00 am - September 15 @ 5:00 pm
  7. West Texas Agricultural Chemicals Institute Annual Conference, Lubbock, Sept. 13

    September 13 @ 8:00 am - 5:00 pm
  8. Tennessee: Soybean Disease Field Day, Milan, Sept. 13

    September 15 @ 8:00 am - 5:00 pm
  9. California: Rice Weed Course, Biggs, Sept. 16

    September 16 @ 8:00 am - 5:00 pm
  10. Michigan: Soybean Harvest Equipment Field Day, Edwardsburg, Sept. 16

    September 16 @ 8:00 am - 5:00 pm
  11. Missouri: Farm Lease Program, Sept. 20

    September 20 @ 8:00 am - 5:00 pm
  12. California Almond Conference, Sacramento, Dec. 6-8

    December 6 @ 8:00 am - December 8 @ 5:00 pm

Doane Cotton Close: Weather Forecast Has Futures on Defensive

Ernst Undesser
By Ernst Undesser May 16, 2014
Forecasts for some long-awaited rain in west Texas and a historical pattern of significant “drought breaking” changes in patterns for that part of the Plains around Memorial Day have cotton futures on the defensive. Technical damage this week was severe, leading to yesterday’s counsel for futures/options users to push price protection to 50% of expected production.

Here’s the week in review: Cotton planting Monday came in at 30%, down only 4 pts from the 5-year average after closing last week’s 9 pt gap. A little rain fell in west Texas, but barely enough to moisten the topsoil. But planting progress is running at or ahead of normal pace everywhere else and other than for California, yield prospects good.

 
We’ve said for weeks that it seemed the surprising and persistent strength in old crop cotton was the only logical reason for new crop strength in the face of huge global stocks. USDA added to the bearish case with last Friday’s global supply/demand balance sheet for 2014/15 showing still further global stocks build-up. Even if you don’t count China’s stocks at all the planet is sitting on a 6-7-month supply when a 3-month supply is considered adequate buffer against weather problems for new crop.

This week’s clear topping action began when the old-crop/new-crop spread in futures began to tighten via weakness in old crop. But now the December contract shows a significant downside reversal in the low 80s. These prices actually represent a near “worst case” scenario for 2014/15 yield-wise and that means substantially more downside risk than upside potential. Thus, our advice to have half your expected production priced; unusually aggressive for this early in the crop year.

Ernst Undesser
By Ernst Undesser May 16, 2014