facebook_pixel

Texas Rains Mean Happy Growers, Slipping Market

It was and still is all about weather.

After a four year hiatus, West Texans can again declare, “It always rains by Memorial Day.” The million dollar rain came.

Cotton prices were on the defensive all week as prices moved lower by the day. Leading the price momentum shift lower was the potential rain forecast for the Southwest plains. Intraday forecasts during the week offered increased rainfall estimates, bringing about lower prices. Speculative fund managers, tuned to the forecasts and reading their technical charts, began taking profits and exited the market in mass. The only defense offered came from mill price fixations against on-call sales and actual mill buying.

However, speculative fund profit taking was just too extensive once Mother Nature’s nectar began to bless the western New Mexico and Texas plains. Cotton prices moved lower – some ten cents below the 96 cent highs recently observed. Too, excellent moisture conditions were forecast over the entire Southwestern cotton belt through the weekend – the multi-million dollar variety.

While this does not signal the end of the 100-year drought, it was the first step. Yet, the total absence of subsoil moisture will deem it necessary that a continuation of timely rains throughout the growing season will be necessary if the crop is to live up to its potential.

So, where does the market go from here?

First, the lower prices uncovered excellent demand. Unfixed mill call sales continue to be supportive to the market, but were reduced in the downturn. The price hemorrhaging should now be mostly contained, but prices could slip another three to four cents lower before all the damage is down.

The possibility for July to retrace back above 88 to 89 cents is now the first target. Mill demand has resurfaced as the dwindling level of quality is in great demand and with prices six cents below those of ten days ago – especially now that mill margins are very positive at current levels.

Earlier comments had suggested that a good rain would take at least three cents out of new crop, and that was the reaction of the New York December futures contract – down from 82-83 cents to the 79 cent level. One cannot overemphasize the importance of continued timely rains in Texas.

Yes, there is dancing is the streets now, but without moisture a month from now the dancing shoes will be covered with dust and wilting cotton. What happens tomorrow is more important than today. Nevertheless, we will continue the rain celebration for now.

The price damage has been done. Expectations are for stable to higher prices.

Topics: ,

Leave a Reply

Market Analysis Stories
white ripe cotton field ready for harvest
Market Analysis

Strong Market Support Pushes Prices Higher

April 21, 2017

Cotton prices made a run higher this past week, as export sales and inquiries continue to provide support to the market.

Market Analysis

Cleveland: Strong Exports Driving World Stocks Lower

April 10, 2017

Strong export sales and brisk shipments of U.S. cotton should continue for at least 2-4 more months, helping to lower world cotton stocks and maintain prices in the 70s.

Young Cotton Plant
Market Analysis

No Surprises When It Comes to Acreage or Exports

March 31, 2017

U.S. cotton acreage predictions in USDA’s 2017 Prospective Plantings report were not surprising. Neither were the export sale and delivery numbers that the U.S. continues to enjoy.

Market Analysis

Cleveland: Market Still Looking for Its Top

March 26, 2017

The market is now showing a tendency to sell off and lose daily gains as the trading day ends. It’s really doing nothing more than still trying to pick its top.

Market Analysis

Cotton Prices Reach Upper Third of Historical Range

March 17, 2017

The cotton bull made another impressive stand on the past week, as cotton prices continue to hold in the upper one-third of its historical price range.

Market Analysis

Shurley on Cotton: New Crop Strength and Outlook

March 13, 2017

Four factors are driving the new crop strength and outlook for cotton in 2017.

Market Analysis

It Bears Repeating – Price New Crop Now!

March 13, 2017

Two things to keep in mind: If you like the price enough to plant cotton, then like the price enough to sell some of it. And, December futures are expected to move 10-15 cents lower.

Around The Gin
Product News

UPI Adds New Herbicide Products

April 14, 2017

UPI has added two new herbicides to its portfolio of high quality crop protection products for the U.S.

Product News

FiberMax One Ton Club Membership Tops 1,000

April 14, 2017

A record number of growers qualified for the FiberMax One Ton Club in 2016 with four-bale and higher yields with FiberMax varieties.

Product News

Deltapine NPE Program Kicks off Tenth Year

April 10, 2017

Nearly 200 growers will participate in the tenth season of the Deltapine New Product Evaluator (NPE) Program.

Product News

BASF Expands Dicamba Manufacturing Facility

March 22, 2017

BASF has completed a $270 million expansion of its Beaumont, TX, facility – the largest agricultural products facility investment in company history.

Product News

Topguard Terra Label Amendments for Cotton Root Rot in Texas

March 7, 2017

Texas growers now have additional preplant and post planting options for using Topguard Terra to control cotton root rot.

Product News

Advanced Traits from PhytoGen Protect Yield and Quality

March 6, 2017

PhytoGen varieties offer more and better in-plant, native trait protection to help cotton thrive, protect quality and optimize yields.

Product News

Six Greenleaf Nozzles Approved for Use with XtendiMax

February 24, 2017

Six TurboDrop D Series nozzles from Greenleaf Technologies have been approved for use with Monsanto’s XtendiMax herbicide with VaporGrip Technology.

Product News

EPA Approves DuPont’s FeXapan Dicamba Herbicide

February 17, 2017

DuPont has received EPA registration for FeXapan herbicide plus VaporGrip Technology, a low-volatility dicamba formulation for use on cotton and soybean varieties carrying traits that provide tolerance to dicamba and glyphosate herbicides.

Latest News
Market Analysis

Strong Market Support Pushes Prices Higher

April 21, 2017

Cotton prices made a run higher this past week, as export sales and inquiries continue to provide support to the market.

Market Analysis

Shurley on Cotton: Exports Continue Upward Trend

April 12, 2017

USDA’s April supply and demand estimates increased U.S. cotton exports for the 2016 crop year to 14 million bales – a surprising upward jump, but one that is certainly justified.

Market Analysis

Cleveland: Strong Exports Driving World Stocks Lower

April 10, 2017

Strong export sales and brisk shipments of U.S. cotton should continue for at least 2-4 more months, helping to lower world cotton stocks and maintain prices in the 70s.

Market Analysis

Shurley on Cotton: How Do Increased Acres Impact Prices?

April 3, 2017

The market anticipated an acreage increase for cotton, and USDA says the number is roughly 350,000 acres more than most expected. How does this impact the market and why?

Market Analysis

No Surprises When It Comes to Acreage or Exports

March 31, 2017

U.S. cotton acreage predictions in USDA’s 2017 Prospective Plantings report were not surprising. Neither were the export sale and delivery numbers that the U.S. continues to enjoy.

Market Analysis

Cleveland: Market Still Looking for Its Top

March 26, 2017

The market is now showing a tendency to sell off and lose daily gains as the trading day ends. It’s really doing nothing more than still trying to pick its top.

Market Analysis

Cotton Prices Reach Upper Third of Historical Range

March 17, 2017

The cotton bull made another impressive stand on the past week, as cotton prices continue to hold in the upper one-third of its historical price range.

Market Analysis

Shurley on Cotton: New Crop Strength and Outlook

March 13, 2017

Four factors are driving the new crop strength and outlook for cotton in 2017.

Market Analysis

It Bears Repeating – Price New Crop Now!

March 13, 2017

Two things to keep in mind: If you like the price enough to plant cotton, then like the price enough to sell some of it. And, December futures are expected to move 10-15 cents lower.

Market Analysis

Grab Hold. The Bulls Are Running!

March 6, 2017

The cotton bull, with freshly sharpened and longer horns, has broken out and is trying to push old crop May and July contracts above 80 cents.

Market Analysis

Cleveland: Of Export Sales, USDA Numbers and BCI

February 27, 2017

Dr. O.A. Cleveland praises U.S. cotton exports, muses about USDA predictions and calculations, and ponders the role of Better Cotton Initiative in the U.S.

Market Analysis

Time for Growers to Start Pricing Their 2017 Crop

February 17, 2017

Dr. O.A. Cleveland believes growers should price at least 50% of their anticipated 2017 crop now with the December ICE contract above 74 cents.

Market Analysis

Shurley on Cotton: A Lot Going on and a Lot to Digest

February 13, 2017

The 2017 cotton market appears to be on increasingly stable and improved economic footing compared to 2016.

Market Analysis

NCC: U.S. Cotton Industry Hinges on World Demand, China, Global Supply

February 11, 2017

According to NCC economists, several key questions will shape the 2017 economic outlook for the U.S. cotton industry.

Market Analysis

Market Fueled by Demand, Mills and Shrinking Carryover

February 10, 2017

Cotton futures continue to hold tight to the 75-76 cent level, thanks to ever-increasing demand, mill indecision and shrinking world carryover.