The December USDA Crop Report leaves the All Cotton total at 18.2 million bales. Average yields were also unchanged at the expected record large 722 pounds per harvested acre. Within the national total there are four offsetting shifts in state production totals. The largest decrease was for California as 60,000 bales were chopped from its total. Oklahoma was pared back 10,000 bales. Increases were noted in the Mid-South with Louisiana’s total raised 50,000 bales, and Missouri’s upped 20,000 bales. Texas, Arizona and the Carolinas are states that might have more changes in their bale total in next month’s report. The cottonseed production total is unchanged from last month at 6.689 million tons.         

COTTONSEED MARKET: The combination of less ginning taking place and more buyers in the market are reportedly the reasons for Eastern and Mid-South markets moving higher. The week following Thanksgiving appears to have provided better buying opportunities. Since that time, there are more resellers in the market and more dairy end users from the Midwest and Northeast. This recent upturn in prices has reportedly caused oil mill buyers to head for the hills.        

Offers and bids are raised in the Southeast and Mid-South, but there is really little new business to show for the higher prices. Compared to last month’s installment, nearby quotes are up from five to ten dollars. Contacts are reporting a lack of end user buying interest at these higher prices. This may be due to the fact that end users managed to satisfy their short-term needs over the past few weeks. The main buyers at these price levels are reportedly resellers. Truck logistics have improved since the Thanksgiving holiday. However, rail movement is a big headache at points of origin regarding cars being placed for loading.        

The Texas market is finally seeing greater availability and this is the main reason it is showing weakness. Over the past couple weeks, nearby prices have dropped twenty dollars. Forward offers have edged lower as well. Some traders are willing to wait it out as they suspect there is still more downside for prices before all the ginning is done. Even with these lower numbers, end users are still not willing to take on ownership for fear of buying too early and paying more. Ginning will likely continue for a couple more weeks and there is plenty of talk about better than expected yields.        

In the Far West several points have mentioned that the clean cottonseed in Arizona is tougher to find offered. The California market is quoted higher as ginning is beginning to wind down in the state. Over the next couple weeks, more gins are expected to complete their gin run. This supply factor is driving up prices. Rail markets have been marginalized over the past couple weeks due to ginning pressure. But, with ginning pressure beginning to subside, the rail market and the supply side of the market will have a greater influence on prices. Traders are pessimistic for much better improvement in usage and disappearance without lower prices. Considering price levels, it appears the market is content rationing demand, but forward prices could weaken providing prices on competing feed ingredients move lower.        

COTTONSEED BALANCE SHEET: The USDA Oilseed Report released on December 12th, doesn’t show any changes to the cottonseed balance sheet. The balance sheets for cottonseed meal and oil have beginning stocks cut nearly in half. Increases to disappearance should keep a bullish tone to the oil market.         

The Sparks balance sheet shows an increase in production of 140,000 tons with reported higher than originally expected seed yields. Exports are reduced by 50,000 tons, as exchange rates and world supply is tighter. These changes net an increase of total supply by 90,000 tons. On the disappearance side, the feed, seed and other category is raised 50,000 tons, as lower prices have been able to attract more feed demand. Ending stocks are upped 40,000 tons.