South Plains Cotton Update

Jay Yates, Extension Risk Management Specialist
Lubbock Agricultural Research and Extension Center

Rains of 1 to 3 inches this week across the entire region are the big news. The area south of Lubbock received the heaviest rains with 5 locations on the West Texas Mesonet recording more than 4 inches of rain so far during the month of May. The big winner (or loser if you got flooded) is Seminole with 5.14 inches of rain since the month began. Other South Plains towns with more than 4 inches are Gail, Lamesa, O'Donnell, and Seagraves. All though not on the South Plains, Memphis also has received more than 4 inches during May. So for all of you who have said we just need one more good general rain to have enough moisture to get this crop started, here's your sign.

Now, it is time to bring out the sun to warm and dry the fields for planting. According to county extension ag agents, planting got under way in full swing on Monday, just before the flooding rains started on Tuesday. Last week we did make some progress with most agents reporting 1 to 5 percent of the crop planted for the week ending May 4th. Before this storm soil moisture was reported adequate to surplus in all areas. If you were to take a sampling today I sure most would be considered surplus.

Last year we fielded questions in our office about prevented planting due to drought and the simple answer was that there is no such thing in West Texas. Flooding rains to our south could actually bring the prevented planting discussion back to the forefront this year. It is still too early in the planting season to call, but if we continue to have a similar pattern of rainfall, there could be some individual fields that actually qualify.

Most corn has already been planted and there's nothing corn likes better than lots of rain. Since this storm did not produce much hail, it was also beneficial to wheat growers who are planning on harvesting grain. I'm sure the seed company marketing folks are happy too, since they convinced their bosses to continue to offer the drought shared risk programs again this year after writing big checks last year.

The FARM Assistance strategic analysis program can help you make long-term decisions like whether or not to pick or strip your cotton. And if you decide to pick it, would it be better to have it custom picked or buy or lease a machine on your own. Decisions like these are what the FARM Assistance system was designed for. Call me at 806-746-6101 to make an appointment.

Net Upland sales of 509,000 running bales were 29 percent above the previous week and 2 percent over the prior 4-week average. The primary buyers were China (198,800), Turkey (118,100), Indonesia (44,900), Pakistan (40,600), Thailand (23,200), and Taiwan (17,200). Sales of 29,500 for delivery in 2007/08 were primarily to Colombia (7,300), China (4,400), and Vietnam (4,100). Exports of 296,200 were 9 percent below the previous week, but 1 percent above the prior 4-week average. The primary destinations were China (127,600), Turkey (48,500), Mexico (18,100), Taiwan (15,100), South Korea (12,100), Thailand (11,600), and Indonesia (11,100). Net American Pima sales of 24,800 were mainly for China (21,900) and India (1,000). Exports of 57,800--a marketing-year high--were primarily to China (38,600), India (5,400), and Turkey (3,800).

Total exports of all cotton at 354,000 running bales were slightly higher than last week, thanks to a marketing year high shipment of Pima, but are still short of the 421,000 bales needed. The current pace of exports would indicate a final tally of about 12 million bales compared to the 13.5 million bale USDA estimate. The current projection is logistically possible as this year's sales are actually ahead of last year, on a percentage of total basis, and during this time last year we shipped and average of 430,000 bales per week. Additionally the Chinese cotton imports have historically been high during the May to July period according to the recent USDA-FAS China Annual Cotton Report. That same report also predicts that China will increase usage by 6 million bales and decrease production by 1.15 million bales with a resulting 7.59 million bale increase in imports.

That brings us to the current situation with the New York futures price. The July contract stopped the 3 week long slide and increased 20 points to close at 4882 yesterday. The December contract closed up 55 points to 5375. Although not enough increase to break the downtrend from a technical standpoint, it is nice to see that we appear to have found the bottom for now. Maybe the market has found a level at which we can move out enough of this crop to make the USDA export estimate. The new supply/demand report comes out tomorrow, given recent action on price, look for a decrease in projected exports and domestic use and an increase in US carryover. Don't expect a big reaction out of market, given the big losses we have already seen. We might even see a slight increase in price if carryover is not increased substantially.

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, the Ag Market Network will be May 15th at 7:30 a.m., featuring Carl Anderson, Mike Stevens and O.A. Cleveland, with special guest speaker Peter Egli of Plexus Cotton Limited.

This newsletter, as well as any resources mentioned, is 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, May 10th. 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.