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2011 Cottonseed Prices: July

Cottonseed Supply/Demand Balance Sheet(000 tons)

Yrs beg Aug 1USDA

June/USDA

July/USDA

July/USDAJuly/CSD
 

2009/10

2010/11E

2010/11E

2011/12F

2011/12F

Beg. Stocks

514

342

342

443

542

Imports

24

0

0

100

100

Production

4149

6098

6098

5530

5600

Total Supply

4687

6440

6440

6073

6242

Crush

1900

2500

2450

2400

2400

Exports

291

290

285

225

250

Feed, Seed,

& “Other”

2154

3207

3163

3060

3073

Total Disappearance

4305

5997

5898

5685

5723

End Stocks

342

443

542

388

519

COTTONSEED fob points
Prices 7-15-11Bid / Offer / TradeYr Ago
Southeast($/ton)

No. Carolina

Spot

330b  /   335-340o  /   332-335t

256t

(as ginned)

OND

230b  /   235o

142-145o

So. Carolina

Spot

340b  /   344o

140-145o

(as ginned)

OND

230b  /   235o

n/a

Georgia So.

Spot

340b  /   350o

252t

(as ginned)

OND

220-225b

139t

Mid-South($/ton)

Memphis No.

Spot

340b  /   360o  /   353-355t

261t

 

Aug

355b

165o

(as ginned)

OND

270b  /   275o  /   271t

n/a

MO Bootheel

Spot

364o

265o

(as ginned)

OND

271t

166o

Southwest($/ton)

West Texas

Spot

370b  /   380-385o  /   380t

265-268o

 

Ag-Sp

385-390o

270o

(as ginned)

OND

350b  /   357-360o  /   350t

162-165o

Far West($/ton)

Arizona

Spot.

405b  /   415o  /   415t

300t

(as ginned)

OND

320t

355-360o

Cal. Corc. N

Spot

455b  /   480o  /   470-480t

260o

& Stockton

Aug

445b  /   450o

n/a

 

OND

355b  /   362t

n/a

 

clock

370-372t

n/a

Specially Processed Products($/ton)
Easi Flo ™ Courtland, AL

Spot

410o

295o

 

OND

305o

n/a

 
b = bid o = offer t = trade n/a = not available

COTTONSEED dlvd. points
Prices 7-15-11 DumpHopperLive FloorRail  
Northeast($/ton)

W. New York

Spot

387o

 

 

 

 

OND

287o

   

SE Pennsylvania

Spot

370o

 

 

 

 

OND

270o

   
NE Ohio

Spot

387o

   

 

OND

287o

 

 

 

Midwest($/ton)

MI (Grand Rpds.)

Spot

397o

 

 

 

 

OND

297o

 

 

 

MN (Rochester)

Spot

 

417-420o

420-430o

 

 

OND

 

320o

325-330o

 

WI (Madison)

Spot

 

410-412o

415-420o

 

 

OND

 

318o

320-328o

 

Southwest($/ton)

Texas / Dublin-

Spot

 

410o

 

 

Stephenville

JAS

 

410o

  
Rail - fob track points($/ton)

Laredo TX

(Mid-Bridge)

Jly-Ag

 

 

 

440o

California

Spot

 

 

 

440b 450o

Idaho (UP)

Spot

 

 

 

433o

 

Aug

 

 

 

430o

 

OND

 

 

 

360o

WA/OR (BN)

Spot

 

 

 

455o

 

OND

 

 

 

375o

b = bid o = offer t = trade n/a = not available

Cottonseed Dairy Buyer Profiles

GROUP 1: Base demand group that will formulate cottonseed in at a 4-6 lb. inclusion rate regardless of price.
GROUP 2: Formulates at a 2-3 lb. inclusion rate regardless of price, and would like to feed at the 4-6 lb. level. However, the last 2-4 lb. is price sensitive.
GROUP 3: This is the major swing factor for cottonseed demand. They enter the market when the price is right or other factors prevail (i.e. short hay supplies), and will subsequently exit when other opportunities exist.
GROUP 4: This group does not have access to, or the ability to incorporate whole cottonseed into their rations. However over time, dairymen in this group will migrate up into Groups 1, 2 or 3.


ACREAGE REPORT: The USDA Acreage report showed 13.725 million acres sown to cotton this year. Compared to USDA's Prospective Plantings report in March, this is an increase over 1.1 million acres. The region with the largest increase was the Southwest with 975,000 more acres, followed by the Far West with an increase of 55,000 acres. In general the increase in acreage was quite evenly distributed across the Cotton Belt, thanks to the strength in cotton fiber prices at the end of last year and over the winter months. On a percentage basis, Pima plantings have increased the most up 41.5% with the majority of the increase in acres coming from California. 

 

COTTONSEED MARKET: The bullish news in the USDA WASDE report at mid-month and the subsequent strength in corn prices helped draw more buyers into the market. This sparked additional buying interest. Nearby markets continue to garner price support based on concerns related to new crop supply. Dairy margins have improved and this is keeping a steady flow of nearby buying. It appears that July will have the strongest Class III milk prices. There has been more inquiries and some trading for new crop supply as well.

Supply in the Southeast has tightened up and offers firmed. It looks like the remaining supply of seed is held in firm hands. The conditions of the crop in North Carolina are the best in the region with two-thirds in the Good or Excellent classification as of mid-July. The crop in Georgia has improved, but there are still spotty dry areas. Regardless of the improved crop outlook, new crop offers were raised several dollars. It appears that there has been enough new crop interest in the market for sellers to push prices higher. However, gins involvement in new crop trading is limited.

The Mid-South market was quiet after a flurry of trading in the first week of July. It appears that merchants have enough ownership that they are able to comfortably sell to the interested dairies that are coming to market. Oil mills haven't been active in the new crop, as prices are not well defined and not much has traded. Gins are not willing to show offers even if the crop looks the best in the country. They are still reluctant to sell. There is hope among gins that oil mills will be able to pay as strong of prices for their cottonseed as they did last year. At this time, it appears possible as long as vegetable oil prices remain strong. But, with a lighter crush expected, oil mills may not need to buy as much seed, which could potentially limit their support for prices. Nonetheless, current prices should be reasonable for crushers to turn a profit.

Nearby offers in West Texas vary with some trades reported at lower numbers. It appears that some merchants are willing to sell out of their supply at these levels, because ginning is getting underway in the Southern Valley and by the end of the month, several gins are expected to be up and running 24/7. Due to the less than ideal growing conditions, yields are projected to be light and runtimes will likely be shorter than normal.

California prices managed to rebound by mid-month, as stronger grain prices have motivated some dairies to start buying. There was more new crop buying being done as well. Nearby supply tightness is a concern and has the potential to drive spot prices higher before the end of the month.

COTTONSEED BALANCE SHEET: USDA's old crop balance sheet had a 10,000-ton reduction to exports, which offset an increase to the Feed, Seed and Other category. Old crop ending stocks remain unchanged. For new crop, production dropped 345,000 tons on crop losses expected from the drought conditions in West Texas. Imports appeared on the balance sheet this month at the 100,000-ton level. Exports were lowered 75,000 tons while the Feed, Seed and Other category fell 25,000 tons. The net effect of the changes was ending stocks being lowered by 45,000 tons.

The Cottonseed Digest's old crop balance sheet had exports lowered 5,000 tons, as stout prices and recent strength in the dollar are expected to prevent any new sales in the remaining weeks of the crop year. End users' demand has proven to be stronger than anticipated and for this reason the Feed, Seed and Other category was raised 68,000 tons. As a result of these changes ending stock were lowered 63,000 tons, which brings the stock-to-use ratio down to 9.2%.

The largest change for new crop was the 259,000-ton drop in production. This is based on over half of the Texas cotton crop being classified as being in Poor to Very poor condition. Easily a third of the crop in West Texas could be lost and the remaining acreage will have below average yields. Total supply was lowered 222,000 tons. On the demand side, the crush was lowered 100,000 tons, on tighter seed supply while the industry should have ample stocks of oil to start the new season. Exports were lowered 40,000 tons, as price levels are apt to limit demand and importing countries may satisfy their needs from purchases from Australia. Feed demand is unchanged which will be lower than last year due to tighter supply. Ending stocks dropped 82,000 tons, which suggests prices will remain stout.


For weekly cottonseed pricing and commentary contact:

James Bueltel
Senior Analyst/Editor
Informa Economics, Inc.
3464 Washington Drive, Suite 120
Eagan, MN 55122
Direct: 651-925-1052
Main: 651-925-1060
Fax: 651-925-1061
james.bueltel@informaecon.com
www.Informaecon.com


Every effort has been made to assure the accuracy of the information and market data which is provided in this publication as a compilation for the use of its readers. Information has been obtained by Informa Economics, Inc. from sources believed to be reliable. However, because of the possibility of human or mechanical error, Informa does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

Published by Informa Economics, Inc., 3464 Washington Drive, Suite 102, Eagan, MN 55122-1438.

 

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