Shipping Cotton Quickly and in Good Faith

From Cotton Grower Magazine – July 2014

 

The relationship between cotton shippers and warehouses dates back to the beginnings of the cotton industry. But what was once written on a blackboard or sealed by a handshake has been swept away by a rapidly moving global industry. Time and communication – or the lack thereof – has often become a sticking point in today’s movement of cotton.

Like other segments of the U.S. cotton industry, warehousing has seen its share of transition and change.

“In 2006, when the Performance and Standards Task Force was created for the industry, there were roughly 420 cotton warehouses with cotton storage agreements,” said Dale Thompson, manager, Marketing and Processing Technology for the National Cotton Council. “Today, that number sits at approximately 350 warehouses. Although we’ve seen a net decline in the number of warehouses, capacity is relatively unchanged. We can still handle a large crop.”

Thompson noted that the warehousing segment had to adjust from servicing a domestic textile industry that wanted consistent, running shipments throughout the year to servicing an export market made up of windows for movement of several million bales of cotton at a time. That, he said, puts pressure on all parts of the industry, particularly the transportation and warehousing sector.

“You can get cotton scheduled to ship,” he added. “But if the trucks aren’t there, it backs everything up through the system. Everything today is geared toward being able to provide service on an as needed basis. The challenge comes in handling those peaks.”

Several good electronic calendars and scheduling tools are available today, and most warehouses rely on them to help manage shipping requests based on supply and available transportation. One of the newer systems – Batch 23 from EWR, Inc. – is now being enhanced to capture all orders and load dates requested by shippers and the earliest available load dates offered and provided by warehouses to allow USDA a way to monitor activity without relying on standard weekly shipping reports from warehouses.

“Batch 23 has been in place for three years,” said Thompson. “It was developed at the request of the cotton industry, but what has not been in place is the ability to capture and store requested and offered shipment dates. The NCC has agreed to underwrite the cost of developing these additions to the software. Shippers will now be able to see information on all of their shipping orders at warehouses. The warehouses can see information on offered and actual shipping dates. And USDA can monitor it all.”

This information will allow USDA and warehouse examiners to make sure all parties involved are operating in good faith to move cotton as quickly as possible.

USDA will focus on actual shipping activity. The shipping standard in the Cotton Storage agreement requires warehouses to ship at least 4.5 percent of their available inventory each week. There’s risk involved for warehouse operators found to be delaying shipments or not meeting other terms of the shipping standard may receive notices of violation or lose the ability to store Commodity Credit Corporation loan-eligible cotton.

Topics: , ,

Leave a Reply

Marketing Stories
OA Cleveland
Market Analysis

Cotton Prices Itching to Move Higher, as Growers Ponder Acreage Shifts

March 27, 2015

The market has shown it is comfortable with higher prices, as planting and production dynamics hold the potential for larger than expected U.S. cotton plantings.

Market Analysis

Cleveland: Market on Path to Higher and Higher Lows

March 20, 2015

Cotton prices bounced back in response to the time-honored adage, “low prices cure low prices.” But there are still a few bumps and curves along the way.

Marketing

Cotton Inc. Risk Management Seminar Coming to Lubbock

March 16, 2015

Cotton Incorporated is bringing its popular Cotton Price Risk Management Seminar to Lubbock, TX on April 8.

Market Analysis

Shurley on Cotton: March Madness as Prices Tumble

March 16, 2015

Thus far, March has not been kind to the cotton market.

Market Analysis

Plexus: Is the Worst of the Selloff Behind Us?

March 13, 2015

The cotton market seems to be regaining its footing, and trade buying is starting to resurface. This leads us to believe that the worst of this selloff may be behind us.

Market Analysis

Plexus: Market Momentum Continues to Stall

March 10, 2015

Market momentum has clearly been stalling. Physical business needs to pick up, but the latest wave of buying may be over for now.

OA Cleveland
Market Analysis

Cotton Market Sliding Along with No Drastic Moves

March 6, 2015

Much like the icy conditions across the Cotton Belt, prices have slid back and forth and sideways, as the price charts remain void of any drastic activity.

Around The Gin
Product News

New 2015 CROPLAN Cotton Varieties Feature Bollgard II XtendFlex Technology

March 19, 2015

WinField is adding Monsanto’s new Bollgard II XtendFlex cotton trait to two new CROPLAN cotton varieties for 2015.

Precision Technology

New Features for TeeJet Aeros 9040 Field Computer

March 18, 2015

TeeJet has added new features to its Aeros 9040 Field Computer for 2015.

Precision Technology

TeeJet Launches New DynaJet Flex Nozzle Control System

March 17, 2015

The new DynaJet Flex 7120 nozzle control system from TeeJet Technologies helps growers manage spray quality across a variety of operating speeds and application rates.

Product News

New Cheminova Chemistry to Help Control Herbicide Resistant Weeds

February 23, 2015

Cheminova plans to register pethoxamid, a new herbicide active ingredient, to help growers manage herbicide-resistant weeds.

Product News

Brake Herbicide Receives Section 18 Approvals in Six States

February 18, 2015

Brake Herbicide has received Section 18 emergency use exemptions for control of glyphosate-resistant Palmer amaranth in six cotton producing states.

Precision Technology

TeeJet Matrix 430 Provides Simple, Easy-to-Use Guidance

February 18, 2015

TeeJet Technologies’ new Matrix 430 GNSS guidance system is ideal for a wide range of field applications.

Precision Technology

TeeJet Launches RX520 High-Precision GNSS Receiver

February 17, 2015

TeeJet Technologies has introduced the RX520 dual frequency GNSS receiver for precision farming operations.

Disease Control / Nematodes

Velum Total Approved for Cotton, Peanuts in 2015

February 12, 2015

Bayer CropScience has received registration for Velum Total, a new insecticide/nematicide for use in cotton and peanuts in 2015.

Latest News
Market Analysis

Cotton Prices Itching to Move Higher, as Growers Ponder Acreage Shifts

March 27, 2015

The market has shown it is comfortable with higher prices, as planting and production dynamics hold the potential for larger than expected U.S. cotton plantings.

Market Analysis

Cleveland: Market on Path to Higher and Higher Lows

March 20, 2015

Cotton prices bounced back in response to the time-honored adage, “low prices cure low prices.” But there are still a few bumps and curves along the way.

Market Analysis

Plexus: Market Bumps on Weaker Dollar and U.S. Supply Questions

March 20, 2015

While most commodity prices turned lower again, cotton rallied a bit, thanks to a constructive U.S. export sales report. But the big question going forward is how many tenderable grades are left in the U.S.?

Marketing

Cotton Inc. Risk Management Seminar Coming to Lubbock

March 16, 2015

Cotton Incorporated is bringing its popular Cotton Price Risk Management Seminar to Lubbock, TX on April 8.

Market Analysis

Shurley on Cotton: March Madness as Prices Tumble

March 16, 2015

Thus far, March has not been kind to the cotton market.

Market Analysis

Dull Trading Likely in a Stumbling, Mumbling Market

March 16, 2015

After losing its prior month gains in one week, the cotton market was left stumbling and mumbling. We are now likely in for a month – maybe two – of dull trading.

Market Analysis

Plexus: Is the Worst of the Selloff Behind Us?

March 13, 2015

The cotton market seems to be regaining its footing, and trade buying is starting to resurface. This leads us to believe that the worst of this selloff may be behind us.

Market Analysis

Plexus: Market Momentum Continues to Stall

March 10, 2015

Market momentum has clearly been stalling. Physical business needs to pick up, but the latest wave of buying may be over for now.

Market Analysis

Cotton Market Sliding Along with No Drastic Moves

March 6, 2015

Much like the icy conditions across the Cotton Belt, prices have slid back and forth and sideways, as the price charts remain void of any drastic activity.

Market Analysis

Shurley on Cotton: Not Surprisingly, Market Improvement Slows Down

March 2, 2015

The market is still full of uncertainties, and this recent slowdown might just be a signal that the market needs to take a breather.

Market Analysis

Quality Continues to Drive Cotton’s “Joyful Ride”

February 21, 2015

Cotton’s joyful ride continues, as prices have pressed the 65 cent level, driven by demand for quality machine harvested cotton.

Market Analysis

Plexus: Time for the Market to Rest and Regroup?

February 20, 2015

Look for the market pull back a bit and regroup over the coming weeks. But don’t worry. It’s just taking a breather.

Market Analysis

Plexus: Buying Pressure Should Keep Cotton Moving Up

February 18, 2015

Buying pressure over the coming months should help maintain the current upward move for cotton.

Market Analysis

Market Faces Long and Crooked Row to Higher Prices

February 17, 2015

The market has a very long and crooked row to hoe on its path to higher prices. However, it is sending multiple signals that the 57 cent resistance level did hold, and prices can now begin to ease higher.

Market Analysis

Shurley on Cotton: Upward Progress Finally Being Made

February 11, 2015

Prices should be nearer the bottom end of their likely range. If you’re going to plant cotton in 2015, be patient and wait for possible rallies this summer.