South Plains Cotton Update on Ag Talk on Fox Talk 950 for Thursday February 28th, 2008.
Jay Yates, Extension Risk Management Specialist at the Lubbock AgriLife Research and Extension Center.
The unanimous comment in county agent reports this week was that it is very dry every where. The little bit of moisture we received, as reported in last week's update, was immediately sucked up by warm temperatures accompanied by 50 to 60 mph winds. Fire danger is extremely high in all areas of West Texas right now. After last year's abundant rainfall during the growing season, there is plenty of fuel for the numerous fire that have burned the area this week. Traveling from Cochran County to Eastern Hale County Wednesday took me through a large cloud of smoke from a fire in Northern Lubbock County. Fire also threatened the communities of Snyder and Robert Lee this past week. Early planted dryland wheat is still alive. Anything planted past mid-September just isn't there. Irrigated wheat has started to grow with the warmer temperatures. Air temperatures were in the upper 60's yesterday with soil temperatures in the lower 50's. Small grains planted for cover on cotton ground are being irrigated, further adding to the increased cost of production for the current year.
Fiber quality for the week ending February 21st remains excellent with the predominant color grade of 21+, leaf 3, staple 36.0, mike 4.1, strength 29.1, uniformity 80.6, and bark of 11.9%. For the same time period Lamesa had color grade of 21+, leaf 3, staple 35.7, mike 4.1, strength 29.0, uniformity 80.6, and bark of 20.6%. Season totals are almost identical, with lower total bark counts of 3.4% and 7.8% respectively. Daily receipts have dropped to only 16,000 samples per day, indicating about 10 days of ginning left to put this one in the books. Lubbock has classed 3.7 million bales and Lamesa 1.4 million as of Wednesday, February 27th.
Pre-plant yellow herbicides are being applied across the area between wind storms. We have been fortunate so far that there has not been more sand blowing with the winds, just smoke. The farmers I visited with this week all seem to be planting pretty much the same as last year. We will definitely see more rotation of land with cotton disease problems however. I haven't spent much time south of Lubbock yet this year, so I'm not sure how many peanut acres we will have.
With both commodity and input prices at or near all-time highs, how do you decide which direction to take your farming operation? Should you buy a new combine or a cotton picker or just update the old strippers? All of these questions are what the FARM Assistance program were designed to help you answer. Call me at 806-746-6101 to schedule an appointment.
USDA Loan stocks of Upland continued to decline to 10.01 million bales as of February 19th. ELS stocks also declined to 291 thousand. Certified stocks increased to a total of just over 565 thousand bales in warehouses, 11,865 issued by USDA and 32,627 awaiting review.
Net Upland sales of 196,300 running bales were less than half of last week's strong level. Sales were mainly to Mexico (63,900), China (36,200), Indonesia (20,400), Turkey (18,900), and Bangladesh (16,700). Net Upland sales of 11,500 for delivery in 2008/09 were for Turkey (4,400), Mexico (3,900), and Indonesia (3,200). Exports of 162,000 were also down significantly from last week. The primary destinations were China (48,500), Mexico (24,900), Indonesia (18,500), Turkey (17,800), South Korea (11,400), and Thailand (8,100). Net American Pima sales of 17,100 were primarily for India (7,200), Hong Kong (2,300), the Netherlands (2,200), and Turkey (2,100). Exports of 21,700 were mainly to Pakistan (6,000), India (4,000), the United Arab Emirates (3,300), and the Netherlands (2,200).
Has anyone noticed that March '08 Minnesota Spring Wheat traded above $20 for the last three days? I know we don't grow for that market, but is that any indication of where July '08 Kansas City Hard Red Winter Wheat is going? I hope no one is still short wheat hoping it will come back to them.
Cotton has been crazy this week. No doubt what is going on in the wheat market has had some impact. The big sales to China reported last Friday, followed by dismal sales and shipments reported this week have also had an effect on the market. More outside money continues to flow into commodities as investment managers see greater returns on commodity index funds than stock funds. This will continue to add both liquidity and volatility to the markets. The week was marked by a new life-of-contract high 8560 on the December '08 contract. After the 9, 18 and 40-day moving average convergence we have entered a clear up trend. However, the steepness of the trend combined with the 120 point gap just below 80 cents, indicates just how tenuous it is. I think the key word in this market until the acres are planted and the wheat crop is know, is volatility.
For more information on cotton marketing be sure to check out Dr. John Robinson's weekly cotton marketing newsletter by clicking on Market Outlook under the Resources drop down list 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.
I would also like to take this opportunity to invite everyone to join us for the final presentation of the South Plains Profitability Workshop on March 4th (Yes, that's primary election day) at the Texas AgriLife Research and Extension Center at 1102 E. FM 1294 just north of the Lubbock airport. The cost is $20, which includes a delicious lunch and a take home CD. To get a head count for lunch, we would appreciate a call at 806-746-6101 to let us know you are coming. The new website associated with the workshop is southplainsprofit.tamu.edu.
That's your South Plains cotton update for Thursday, February 28th. This is Jay Yates, Risk Management Specialist with the Texas AgriLife Extension Service. Join me each Thursday at this same time right here on Ag Talk on Fox Talk 950.
