2018-04-11 / Farm & Ranch


Rain and USDA reports were highlights this week

April 6, 2018

Cotton futures at the Intercontinental Exchange settled lower three out of five sessions this marketing week that began March 23. May cotton lost a total of 69 points, and December lost a total of 22 points. Rain in West Texas, uncertainty in the equity markets, expectations for increased U.S. cotton acreage and lukewarm sales volume in China’s reserves were among the factors negatively affecting the market.

Storms brought much needed precipitation along with gusty winds and hail to parts of West Texas Tuesday afternoon and evening. Rain accumulations of an inch or more were reported in the Lubbock area; however, some areas received less. Overall, the storms seemed to favor the eastern parts of the West Texas region. While the rain was welcome, much more will be needed ahead of planting. Drought Conditions

According to the most recent USDA report, released prior to the rainfall, 80 percent of acres’ top soil in the northern High Plains was rated very short. In the southern High Plains, 81 percent was rated very short. Topsoil conditions in the Rolling Plains were somewhat better at 64 percent very short in the northern part of the area and 48 percent very short in the southern part.

As the storm system slowly moved east and south, a 40 to 100 percent chance of rain was in the forecast for South Texas from the Lower Rio Grande Valley to the Upper Coastal Bend. Many South Texas fields have been planted, and seedlings have emerged. Thus, any moisture will help dry soils. Overall, 8 percent of Texas acreage was planted versus 3 percent last year and the five-year average of 2 percent, according to the latest report from the National Agricultural Statistics Service. Export Demand Continues

Strong export sales and shipments continued in the week ended March 22, according to USDA. Net sales of U.S. Upland cotton totaled 304,300 running bales, down only 10 percent from the previous week and 9 percent from the four-week average. Vietnam, Indonesia and China were the top three buyers. Sales for the 2018-19 marketing year totaled a net 62,100 bales, primarily for Thailand, China and Vietnam. Export Shipments

Export shipments of U. S. cotton continued to exceed the weekly average needed to meet USDA’s most recent forecast. Shipments in the most recent reporting week were 438,400 bales, up 3 percent from the previous week and 7 percent better than the four-week average. The top destinations were Vietnam, China and Turkey.

Planting Intentions

The much- anticipated planting intentions report was released by USDA today, and the figure fell within the range of traders’ expectations. The department predicted U.S. farmers will plant almost 13.47 million acres of upland and pima cotton this year, up 7 percent from last year. Pima accounts for 262,000 acres of the total. The National Cotton Council in early February released the results of its survey, which indicated 13.08 million acres would be planted, and USDA’s annual Ag Outlook Forum, also in February, predicted 13.3 million cotton acres. The USDA figure had no negative impact on cotton futures.

USDA pegged Texas acres at 7.3 million, up 6 percent from last year. Oklahoma farmers are expected to plant 680,000 acres, up 16 percent, and Kansas acres are expected to increase 40 percent to 130,000. China’s State Reserve Auction

The daily auction of cotton from China’s state reserve continues to disappoint market observers. The daily average of cotton sold versus what was offered was only 53.2 percent. The general consensus is the low volume of sales may be due to a larger- than- expected Chinese crop last year. Another factor could be the quality of the cotton being offered.

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