Friday, May 16, 2014

Doane Cotton Close: Weather Forecast Has Futures on Defensive

AgFax.Com - Your Online Ag News Source


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.



Leave a Reply

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 Your email will not be published or shared with third parties.

Sunbelt Ag News

    DTN Livestock Midday: Lean Hog Futures Retreat Farther7-29

    DTN Grain Midday: All 3 Commodities Lower7-29

    DTN Cotton Open: Trades Lower in Early Going7-29

    DTN Livestock Open: Lean Hog Futures on Defensive7-29

    DTN Grain Open: Futures Falter, Start Lower7-29

    Keith Good: Bugs’ Resistance to GMO Corn in Brazil Proving Costly7-29

    Grain TV: Increased Soybean Demand Rallies Market7-28

    Doane Cotton Close: Rebounds from Oversold Conditions7-28

    DTN Livestock Close: Feeder Futures Explode to New Record Price Levels7-28

    AFB Grain-Soybean Close: Wheat Unable to Follow Corn, Soybeans Higher7-28

    AFB Cotton Close: Moves Higher in Narrow Range7-28

    AFB Rice Close: Futures Down Slightly7-28

    Crop Progress: Corn, Soybean Conditions Decline, Still at Historical Highs – DTN7-28

    DTN Cotton Close: Higher on Suspected Weekend Business7-28

    DTN Grain Close: Soybeans Rally on Dry Forecast, Exports7-28

    DDGs: China Issues New Import Rules, U.S. Unlikely to Comply – DTN7-28

    Cattle: Minimizing the Risk of Scours — DTN7-28

    Good on Grain: Storing the 2014 Corn Crop7-28

    DTN Fertilizer Outlook: Domestic Ammonia Prices Down Slightly7-28

    Flint on Crops: Challenges for Farmers Keep Coming, Keep Changing7-28

    USDA Commentary: Weekly Cotton Markets, Weather by Region7-25

    Rose on Cotton: No Pleasure in this Market Made for Bears7-25

    Rice Market: U.S. Futures Decline as Global Prices Rise7-25

    Rice Crop: Harvest Begins Slowly in Louisiana and Texas7-25

    Rice Commentary – Rice Farmers Need to Consider a New Business Plan7-25

    Leave Your Guns at the House, Boys.7-25

    Peanuts: 15% Of Crop Ungathered In Key Argentine Production Area7-25

    Rail Car Delays Causing Dread Among Elevator Operators – DTN7-25

    Catfish Production: Water Surface Acres at 63,700 Acres7-25

    USDA: Peanut Price Highlights7-25

    Arkansas: New iPhone App Simplifies Farmers’ Finances7-25

    Taking the Risk Out of Buying Used Equipment — DTN7-25

    North Carolina: Rediscovering Grain Sorghum — DTN7-25

    Peanuts: Worms Still Building In SE; Rains Boost West’s Crop – AgFax7-25

    Shurley on Cotton: Prices Try to Stabilize, Still Show Weakness7-25

    Southern Soybean Insect Situation Gets Complicated – AgFax7-25

    AgFax Wildlife Review: Wild Hogs Damaging Levees in Louisiana7-25

    Ethanol: Final 2014 RFS Release ‘Imminent’ – DTN7-24

    Doane Cotton Close: Prices Break Out of Range Lower7-24

    Rice – Arkansas, Mississippi – Blast Becomes Major Concern – AgFax7-24

    New Rural Infrastructure Fund Established — DTN7-24

    U.S. Grain Transportation: Wheat Demand Increases, Inspections Rise7-24

    2014 Farm Bill Decisions: Base Acre Reallocation Option7-24

    Midwest Grain: Pull the Fungicide Trigger Now? It Depends. – AgFax7-24

    Louisiana: Sodium Nitrite Explored for Wild Hog Control7-24

    U.S. Energy: Refineries Running at Record Levels7-24

    Gasoline Prices: Show 4-Cent Decrease7-24

    Propane Stocks: Continue to Rise7-24

    Diesel Prices: Average Declines by 3 Cents7-24

    Corn: Pollination is One of Nature’s Miracle – DTN7-23

    Wheat Tour Sees One of the Best Crops in Years – DTN7-23

    10 Arkansas and 2 Tennessee Counties Designated Natural Disaster Areas7-23

    Soybeans: Is the 2014 Average Yield Headed for a New Record?7-23

    Drones Monitoring the Garden or Your Crop? One Is Legal, One Is Not.7-23

    Cotton In The Midsouth – Plant Bugs Persist As Bollworms Arrive – AgFax7-23

    Cotton – Plant Bugs, Stink Bugs Overlapping In Parts Of Southeast – AgFax7-23

    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