South Plains Cotton Update

Jay Yates, Extension Risk Management Specialist at the
Texas A&M Agricultural Research and Extension Center.

Homemade jam and local wine may be in short supply this year, but the wheat crop does not appear to have received as much freeze damage as previously suspected. What does that have to do with the cotton crop you might ask? I was just a little afraid that some producers might harvest their wheat early for hay, because of the frost damage, and still have time to come back with a cotton crop. Most wheat I have seen in my travels this week had heads and pivots running, indicating that it will likely be taken to grain harvest. Only wheat that was intended to be hay will likely be baled over the next couple of weeks. The last thing this cotton market needs is any extra cotton to be planted on the Texas High Plains.

Reports from area county extension ag agents continue to tell the story of excellent soil moisture and cool weather. Most are ready for some warmer temperatures to help cotton ground reach critical planting levels. I also hear that summer grasses are behind on growth due to inadequate heat units.

I am still hearing a great deal of uncertainty over what cotton varieties to plant. If you are one of those folks still trying to decide, be sure to check out the Lubbock Center website at lubbock.tamu.edu. Right in the middle of the page you will find links to Dr. Ganaway's 2006 Cotton Performance Test and Dr. Boman's 2006 System Trials. Plains Cotton Growers has an excellent seed cost calculator to figure out exactly what that high priced bag of seed will cost you per acre at there plainscotton.org website.

Severe weather has been on everyone's mind this week. Our prayers go out to folks who lost their homes and businesses due to a line of tornados stretching from Olton to Tulia Saturday night. Monday night saw large hail between Snyder and Sweetwater. If the start to this year is any indication of what is yet to come, it could be a turbulent summer. This reminds me of the supposed Chinese curse, which says, "May you live in interesting times. May you come to the attention of those in authority. May you find what you are looking for". With the interesting weather we have had and the debate over a new farm bill bringing agriculture to the attention of the authorities, we should be careful what we are looking for. Just a thought.

Sales of all cotton last week, at 530,000 running bales, fell 36 percent from the previous week's marketing-year high. That brings year-to-date sales to 86% of projected exports compared to 88% this same time last year. Of that total, 499,800 running bales were Upland and 30,200 were Pima. The primary buyers of Upland were China (186,700), Turkey (65,100), Indonesia (56,200), Pakistan (48,400), and Taiwan (33,100). Net American Pima sales were mainly for China (9,300), South Korea (5,100), Turkey (4,400), and India (2,900). Sales of 26,900 for delivery in 2007/08 were primarily for Pakistan (15,500) and India (5,800). All cotton exports of 362,500, a marketing year high, were made up of 333,100 bales of Upland and 29,400 bales of Pima. The primary destinations of Upland cotton were Turkey (90,300), China (88,500), Indonesia (32,300), Mexico (29,100), Pakistan (17,300), Thailand (13,700), and Brazil (13,700). Pima exports were primarily to China (12,400), India (3,300), Japan (3,000), and Pakistan (2,900). With shipments at 83% of what was needed this week, the new weekly export target is 440,000 running bales for the remaining 14 weeks of the marketing year.

Certificated stocks rose to 710,703 with 19,195 awaiting review putting further pressure on New York futures. The amount of cotton in the USDA loan fell 210,524, but still a whopping 10,369,830 bales. Over 70% of that cotton is in the hands of cooperatives. Let's all hope they know what they are doing. If you are still holding any of the just over 3 million bales of producer owned cotton in the loan, stay on the watch for any equity offers of zero or above.

Even with cotton "on sale" all week, the Chinese cut purchases by over 60%. Maybe that's why the market responded to last week's big sales number with a nearly 100 point move down in the December contract from 5699 last Wednesday to 5600 yesterday. New crop December broke through the bottom of the 56 to 61 cent range that has been in place since September of 2006 with a new life of contract low 5515 on Tuesday. All of the technical indicators I follow currently have the December contract in a solid downtrend. One of the market commentators I regularly read said it best when he stated that this market is "screaming for farmers to plant something else." Too bad many parts of the Texas Southern High Plains don't really have that option for one reason or another. I have even heard of one landlord taking land away from a tenant because he refused to plant cotton for a loss this year.

For more information on cotton marketing be sure to check out Dr. John Robinson's weekly cotton marketing newsletter by clicking on the Cotton Marketing link from the Extension Ag Eco website agecoext.tamu.edu. Also, make plans to listen to the Ag Market Network on your radio May 15th at 7:30 a.m., featuring Carl Anderson, Mike Stevens and O.A. Cleveland. I would invite you to the Lubbock County marketing club meeting, but I'm sure everyone will be busy planting cotton on the 15th.

I've been working on a new blog site and now have it up and running. A transcript of this broadcast, as well as any resources mentioned, are now being posted to tceblogs.tamu.edu/mt/spcu and on DTN Local News Page 7. Of course, you can always reach me at the Lubbock Center at 806-746-6101.

That's your South Plains cotton update for Thursday, April 26th. This is Jay Yates, Risk Management Specialist with Texas Cooperative Extension. Join me each Thursday at this same time right here on Ag Talk on Fox Talk 950.