South Plains Cotton Update on Ag Talk on Fox Talk 950 for Thursday December 27th, 2007.
Jay Yates, Extension Risk Management Specialist at the Lubbock Agricultural Research and Extension Center.
Harvest continues on a stop and go basis for the few acres that remain in the fields. Most cotton is currently stored in modules, where the quality of the tarping gets tested every few days as another front preceded by high winds rolls through. There hasn't been much moisture with any of them, just wind and cold temperatures.
Due to the Christmas holiday, we don't have updated classing statistics today, but I would like to take some time to look into last Friday's Lubbock quality report. Over 92% of this crop has graded color 11 or 21; 86% is staple length 35 or longer with 42% being 37 or longer. The biggest increase over the past couple of years however comes in the micronaire reading with 76% having a mike between 37 and 49 and only 12% falling in the discount range of 34 and lower.
Due to the Christmas holiday there is no export report today. The next report will be released Friday, December 28th.
Certified stocks are back down a bit this week with 548,490 bales in warehouses, none issued by USDA and none awaiting review. USDA Loan stocks of Upland were up slightly this week to 8,868,453. ELS stocks also increased to 222,175.
The FARM Assistance analysis program can help you make strategic business decisions like whether or not to lease that additional farmland or look for something to buy. And if you buy, what repayment terms can you afford? Decisions like these are what the FARM Assistance program was designed for. Call me at 806-746-6101 to make an appointment.
With the absolute importance of China in the world cotton market it is impossible to look at the U.S. commodity markets in a vacuum. Sometimes it appears that's what some analysts want to do. I have to say however, that those I respect the most, like O.A., Mike and Carl have not fallen into that trap. O.A. mentioned on the last Ag Market Network teleconference that he couldn't get eggs for breakfast at a meeting in Dubai because they didn't have any. Reports from Pakistan, India and the Russian Federation all confirm the shortage of wheat and flour. The rest of the world is worried whether or not they will have enough basic food supplies to feed their people, not about cotton. There is plenty of cotton in the world to meet the demand, especially when people don't have enough to eat and what they can get uses up all of their disposable income. I'm not saying this to bring you down after Christmas, just to tell you to be ready.
We are currently in a solid uptrend on the New York futures. Cotton is range bound by supply and demand forces outside the U.S. So, any time speculative trading and competition from the grain and oilseed complex runs cotton to the top of that range, we should be ready to sell some cotton. That's all I'm saying.
Luckily, every time we approach 62 cents the Chinese step in and buy more cotton. It appears they learned their lesson well in 2003 when the panic buying caused by massive flooding, which wiped out over 22 million acres, ran New York Futures to over 85 cents. The Chinese mills have been extremely disciplined in the buying of cotton over the past few years. They known the U.S. loan program will guarantee them a supply whenever they need it.
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, to listen to recordings of the Ag Market Network conference calls, as well as weekly commentary from Mike Stevens, go to AgMarketNetwork.net.
That's your South Plains cotton update for Thursday, December 27th. 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.
