Dec futures made a good run at 67 cents a couple of weeks ago. Since that time, prices retreated to and bounced off the 65-cent area and now moving back to near 66.
The 65 to 67 cents area seems to be firming up. There’s some further support at 64 should we break 65 but let’s hope yet unknown factors don’t take us there. 67 looks to be the ceiling for now but we’ll keep our eyes out for any chance for 68.
As of last weekend (Sept 27) the crop was 13% harvested—close to normal but with only 2 percentage points progress made during the week. As of the 27th, the crop on average was 66% open—normal for that date, but several areas are notably behind.
It’s still early in the harvest season and time can be made up but Georgia and the Southeast as a whole is late in development. I can’t speak for others but in Georgia, boll rot has worsened and cool temps recently have been a concern. We need an extended period of warm, drier, and sunny weather.
The 30-day forecast for the month of October is for below normal temps in the Southeast and Mid-South, above normal in Texas. Precipitation is forecast to be below normal in most areas. Going into October (as of Sept 27) the overall crop was rated 24% poor to very poor (down from the prior week) and 43% good to excellent (down from the prior week).
USDA’s October numbers will be out on Friday (October 9th) next week. As far as the US is concerned, I don’t look for the numbers to change very much. There’s a chance the crop may come in a little smaller than Septembers 17.06 million bales projection.
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An unchanged or smaller crop should help keep us in the 65 cents or better range. A larger crop may put some pressure on us and test 64. Exports and the trade uncertainty with China continue to be the wild card regardless.
This week’s export report released today for the week ending September 24th, show sales of 260.900 bales—up 54% from the prior week. The biggest purchase destinations were Turkey, China, and Vietnam. Shipments were 235,900 bales—down 22% from the prior week. Shipments to China accounted for 46% of the total.
Total sales to China now total 3.32 million bales followed by Vietnam with 1.24 million bales. Total sales thus far in the 2020 crop marketing year are 8.51 million bales—58% of USDA’s estimate for the year—roughly the same position we were last year this time. Shipments to date are 2.33 million bales—well ahead of last year’s pace.
2020 has been a tough, challenging year in many ways. As defoliation and harvest progress, concentrate on trying to not only pick a high-yield crop but preserve and have the best fiber quality you can. Quality, as always, will mean a difference in price and finding a willing buyer for the crop.