Weekly Cotton Comments 09/14 05:07
Cotton Ends Marketing Week on Small Gain
Hurricane, supply-demand estimates and slow export sales confined prices to
worn range. Storm barreled for the Carolinas where cotton crops are estimated
at a combined 1.356 million bales. U.S. crop estimate topped average
expectations by 560,000 bales. Exports raised 200,000 bales and ending stocks
upped 100,000 bales. World ending stocks estimated at 61% of mill use.
By Duane Howell
DTN Cotton Correspondent
A hurricane threatening crops in the Southeast, updated monthly
supply-demand estimates construed mostly as slightly bearish and slow U.S.
weekly export sales have combined to keep cotton futures on a worn path.
December finished the marketing week ended Thursday with a fractional
21-point gain to 81.51 cents, trading within a 273-point range from 81.20 to
83.93 cents. It touched the high Monday amid hurricane crop damage fears. Since
Aug. 13, December has traded within a 471-point range from 85.31 to 80.60 and
closed within a 311-point span from 80.74 to 83.85.
Cash online sales fell to only 91 bales on The Seam. Prices averaged 59.25
cents per pound on average premiums of 11.27 cents a pound over loan redemption
Futures initially fell sharply on USDA's supply-demand report, but pared the
losses on news the Trump administration had proposed a fresh round of trade
talks with China. December closed on a triple-digit loss the next day, however,
amid skepticism that a resolution of the trade dispute might be near.
Hurricane Florence, a Category 2 storm, barreled toward the eye coming
ashore early Friday near the North Carolina-South Carolina line. Crops are
estimated at 806,000 bales in North Carolina and 550,000 in South Carolina. And
there are an estimated 220,000 bales in Virginia and 2.8 million bales in
Georgia. Open bolls as of last Sunday totaled 43% in North Carolina, 28% in
South Carolina, 37% in Virginia and 40% in Georgia.
U.S. all-cotton crop prospects increased 447,000 bales on the month to
19.682 million, but topped average expectations of analysts surveyed by
Bloomberg by 560,000 bales. Production is forecast down 1.241 million bales
from last season.
Yields are expected to average 895 pounds per harvested acre, down 16 pounds
from last month, 10 pounds from last year and 50 pounds from the five-year
average. Upland yields are forecast at record highs of 1,041 pounds in Alabama
and 1,230 pounds in Missouri.
Acreage updates boosted planted acres by 520,000 from the June estimate to
14.042 million and acres for harvest by 410,000 from the August forecast to
10.554 million for an abandonment of 24.9%. Harvested area is projected down 5%
Upland production is forecast at 18.911 million bales off a harvested area
of 13.09 million, down from last year by 6% and 5%, respectively. Pima
production is estimated at 771,000 bales, up 10% from 2017. Upland plantings
reached the highest since 1956 in Oklahoma at 780,000 acres and hit a record
high in Kansas of 165,000 acres.
By regions, upland production estimates rose from last month by 115,000
bales to 5.691 million in the Southeast, 145,000 bales to 4.64 million in the
Mid-South, 205,000 bales to 7.785 million in the Southwest and dipped 10,000
bales to 795,000 in the West.
Beginning stocks of all cotton were revised down 100,000 bales from the
August estimate to 4.3 million, exports raised 200,000 bales to 15.7 million,
domestic mill use was unchanged at 3.4 million and ending stocks climbed
100,000 bales to 4.7 million for a stocks-to-use ratio of 25%. The
season-average farm price projection was unchanged at 75 cents per pound, up
from 68 cents in 2017-18.
Upland production in Texas remained at 6.5 million bales, down 30% from last
year's 9.27 million. Yields of 693 pounds are down from 726 pounds foreseen
last month and 809 pounds in 2017. Planted acres were revised up 300,000 to 7.7
million and harvested acres up 200,000 to 4.5 million, compared with last
year's 6.9 million and 6.5 million acres, respectively.
Crop prospects on the High Plains dipped 30,000 bales to 3.945 million, in
line with most trade estimates and down from 5.445 million bales in 2017.
Revisions upped planted acres 235,000 to 4.785 million and harvested acres
152,000 to 2.54 million. Abandonment is 46.9%. Yields are projected at 746
pounds, down 53 pounds from last month.
Globally, USDA cut beginning stocks 720,000 bales to 83.79 million, boosted
production 1.44 million bales to 121.97 million, raised consumption 320,000
bales to 127.94 million and upped ending stocks 360,000 bales to 77.46 million.
Trade remained at 41.8 million bales.
Beginning and ending stocks for India fell 850,000 bales and 1.05 million
bales, respectively, on revisions in 2017-18 estimates, while mill use there
rose by 300,000 bales -- most of the world increase -- to 25.5 million. The
carryout estimate for India is 11.88 million bales.
Production rose by 1 million bales to 27.5 million in China and 500,000
bales to 10 million in Brazil but fell 550,000 bales to 3 million in Australia.
The global carryout is projected at 61% of mill use. This would be the lowest
in eight years but higher than in virtually every other year before 2010-11.
Meanwhile, U.S. weekly export sales again came in at the low end of
expectations, with net upland sales at 81,700 running bales down 11% from the
prior week and 36% from the four-week average.
All-cotton sales of 87,500 RB put 2018-19 export commitments at 9.1 million,
up 2.063 million or 29% from a year ago. A record high rollover of unshipped
sales from 2017-18 may have contributed to relatively quiet fresh early season
business, some analysts say.
Sales went to 15 countries, with upland business led by Mexico, Indonesia,
Vietnam and Taiwan. Upland and Pima commitments combined are 60% of the updated
USDA forecast, compared with 46% of final 2017-18 exports at the corresponding
point last season. New sales for next season of 17,700 RB lifted 2019-20
commitments to 1.413 million, more than double forward bookings a year ago of
Shipments of 138,500 RB hiked the season's total to 960,100 RB, tightening
the lag behind last year by 24,500 RB. Exports are 6% of the new USDA forecast.
Year-ago exports also were about 6% of the final.
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