facebook_pixel

Cleveland: All Eyes on USDA Planting Intentions

New York cotton and many other world markets closed for a three-day weekend, but traders still filled the air with activity. Strong export interest continues, and the Asian markets remain open, along with the Chinese rumor mills.

The ICE May contract settled the week at 57.72 cents, and all other 2016 contract months also settled below 58 cents. Exports continue to outpace the current USDA estimate, but many felt the current week’s export sales release was disappointing. I would not drop it to that category, but do admit it was not as exciting as in some of the prior weeks.

Mother Nature, to date – and the near-term forecast as well – favor cotton progress across the entire Northern Hemisphere. Granted, it is still early. But April showers are upon us, and those will bode well for cotton plantings to come from late April through mid-June. Certainly, there is planting outside of that time band, but much of the Northern Hemisphere does get planted in that window. The principal exception is, of course, India.

The old crop months of May and July are likely locked in the 55-60 cent trading range, with the possibility of a 100-150 point leakage on either side. The new crop December contract faces much the same story going into planting.

China will continue to dominate the news wires, as most reports now have mid-April as the beginning of the Reserve stocks sale. The industry is anxious to learn of the selling rules and at which markets the Chinese government will target sales. Most do not expect cotton to be offered for export, but the possibility of that very bearish scenario does exist – at least until the government says differently. Therefore, the uncertainty of the resolution of the Reserve sales will continue to tether cotton prices.

Many analysts expect a short covering rally to push New York above 60 cents, basis old crop futures months. Of course, we have had one short covering rally. Nevertheless, there remain a good number of shorts still in the market. Typically, the market will give them another chance to get out.

This time, we should expect a drop to near 56 cents before heading higher and a challenge of 59-60 cents. A rapid rise from 56-cents plus to the 59-cent plus area should not be discounted. However, the price resistance at the 60-cent point looms too great for a technical breakthrough. It seems that it will take market fundamentals to change the market at this time of the season. Such a change can only come from Mother Nature.  And, as previously stated, she appears to be neutral for now.

Weekly export sales were a net of 84,400 RB for Upland and 8,500 for Pima. Upland sales for 2016-17 delivery were 52,100 bales. Shipments were heavy at 214,900 RB of Upland and 7,100 RB of Pima. Vietnam, the largest U.S. buyer, was not a major buyer on the week, but that was not viewed with any consequence. Vietnam spinners have remained well covered all season.

The market is now looking to the March 31 USDA plantings intentions report. U.S. growers are expected to plant 9.4 million acres, up 800,000 from 2015 when the U.S. planted only 8.6 million acres. The early to mid-January estimates were 9.1 million acres. However, it is believed growers will add additional land area to cotton.

As commented last week, we expect the market to continue to trade a very narrow five cent range from 54 to 59 cents during the coming weeks. Basis improvement is expected for high quality cotton, and the new crop contracts will eventually benefit from declining volume of quality stocks around the world.

Give a gift of cotton today.

Topics: ,

Leave a Reply

Market Analysis Stories
Market Analysis

Cotton Prices Settle, Poised to Climb Again

February 16, 2018

The market’s downside move appears to be over, ending a three-week downturn.

Market Analysis

Cotton Futures Nudge Higher, Despite Forecast for Rising U.S. Sowings

February 13, 2018

Cotton futures nudged higher, despite a much-watched survey on U.S. sowings showing a seven-year high, as the estimate came in

Market Analysis

Still Optimistic, but Fundamentals Do Rule the Market

February 3, 2018

Last week’s price correction was overdue, yet the market is still positive. But it’s best to remember that the simple fundamentals of supply and demand do rule the day.

Market Analysis

“Here We Go Again” as Market Preps Another Run

January 26, 2018

The price breakout above 80 cents continues to build its base in the very low 80s as it prepares for its next challenge to the 85 cent level.

OA Cleveland
Market Analysis

Could Quality Shortage Push Cotton to a Dollar?

January 19, 2018

Cotton’s roller coaster price trip is on, and it’s really just beginning. The steep incline is in front of us.

Market Analysis

Shurley: Things to Consider as Prices Climb

January 19, 2018

The reasons for better prices seem fairly obvious, but the strength of the current uptrend has been surprising. Looking ahead, growers need to keep certain factors in mind.

Market Analysis

Cleveland: The Bull Will Continue Charging

January 12, 2018

Multiple market factors are at work, with demand continuing to lead the way to higher prices. That means the bull market will keep charging ahead.

Around The Gin
Product News

The Seam Joins Field to Market

February 23, 2018

The Seam is now an affiliate member of Field to Market, hoping to link sustainability data with blockchain technology.

Product News

Bayer Shares the Risk with Cotton Farmers

January 26, 2018

Bayer offers replant, crop loss and yield protection to growers who plant FiberMax and Stoneville cotton seed.

Product News

Americot Adds New Sales Support in GA, KS and TX

January 23, 2018

Americot has expanded its sales support team in Georgia, Kansas and the Rolling Plains of Texas.

Product News

Indigo Offers Premium for Indigo Cotton Production

January 9, 2018

Indigo Ag has announced a new program that offers significant price premiums for U.S. cotton growers who contract to grow Indigo Cotton.

Product News

New Bayer Varieties Focus on High Yield, Adaptability

January 5, 2018

Bayer releases five new FiberMax and Stoneville varieties for introduction in 2018.

Product News

New PhytoGen TRiO Guards Cottonseed Investment

January 3, 2018

New PhytoGen TRiO seed treatment helps provide early season protection for young cottonseed from diseases, insects and nematodes.

Product News

Americot Adds Seven to Sales, Research Teams

December 20, 2017

Americot has added seven new sales and research associates to the company’s staff across the Cotton Belt.

Product News

Seven New Varieties in Deltapine Class of 18

December 11, 2017

Seven new varieties – including five Bollgard 3 XtendFlex offerings – join the Deltapine product lineup as the Class of 18.

Latest News
Market Analysis

Cotton Prices Settle, Poised to Climb Again

February 16, 2018

The market’s downside move appears to be over, ending a three-week downturn.

Market Analysis

Cotton Futures Nudge Higher, Despite Forecast for Rising U.S. Sowings

February 13, 2018

Cotton futures nudged higher, despite a much-watched survey on U.S. sowings showing a seven-year high, as the estimate came in

Market Analysis

NCC: Multiple Factors Offer Mixed Signals for Cotton

February 11, 2018

According to NCC economists, a few key factors will shape the U.S. cotton industry’s 2018 economic outlook.

Market Analysis

Talking Curveballs, Credibility and Carryovers

February 9, 2018

The February WASDE report served up a curve ball that caught the industry off guard. For the sake of USDA’s reputation, I hope they are correct.

Market Analysis

Still Optimistic, but Fundamentals Do Rule the Market

February 3, 2018

Last week’s price correction was overdue, yet the market is still positive. But it’s best to remember that the simple fundamentals of supply and demand do rule the day.

Market Analysis

“Here We Go Again” as Market Preps Another Run

January 26, 2018

The price breakout above 80 cents continues to build its base in the very low 80s as it prepares for its next challenge to the 85 cent level.

Market Analysis

Could Quality Shortage Push Cotton to a Dollar?

January 19, 2018

Cotton’s roller coaster price trip is on, and it’s really just beginning. The steep incline is in front of us.

Market Analysis

Shurley: Things to Consider as Prices Climb

January 19, 2018

The reasons for better prices seem fairly obvious, but the strength of the current uptrend has been surprising. Looking ahead, growers need to keep certain factors in mind.

Market Analysis

Cleveland: The Bull Will Continue Charging

January 12, 2018

Multiple market factors are at work, with demand continuing to lead the way to higher prices. That means the bull market will keep charging ahead.

Market Analysis

Cleveland: Don’t Ignore the Gift Horse. Feed the Market!

January 7, 2018

Don’t get caught looking a gift horse in the mouth. Cotton prices are at a profitable level for growers, and the market is asking to be fed.

Market Analysis

Shurley: New Year Cotton Policy Update

January 5, 2018

Recent legislative action in Congress could potentially bring cotton back under Title I commodity protection. Dr. Don Shurley explains the details.

Market Analysis

Shurley: December Report Seals the Deal

December 19, 2017

Based on the December USDA Crop Production numbers, any notion of this 2017 crop getting below 21 million bales seems unlikely at this point.

Market Analysis

It’s a Wonderful Day in Cotton’s Neighborhood

December 15, 2017

With apologies to Mr. Rogers…it’s a wonderful day in the neighborhood, and the cotton market has been mine.

Market Analysis

With Prices Rallying, It’s Time for “Significant Action”

December 8, 2017

The long-awaited rally above 70 cents appeared to mature this week. For those not already priced at 75 cents, it could be time to take significant action.

Market Analysis

Prices Push Above 70 Cents as Demand Remains High

December 2, 2017

Driven by tightening world stocks and led by an ever-increasing world consumption, cotton prices continue to move higher.