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2011 Cottonseed Prices: June

Cottonseed Supply/Demand Balance Sheet(000 tons)
Yrs beg Aug 1USDA

June/USDA

June/ USDAJune/ USDAJune/ CSD
 

2009/10

2010/11E

2010/11E

2011/12F

2011/12F

Beg. Stocks

514

342

342

443

605

Imports

24

0

0

0

0

Production

4149

6098

6098

5875

5859

Total Supply

4687

6440

6440

6318

6464

Crush

1900

2500

2450

2500

2500

Exports

291

300

290

300

290

Feed, Seed, & “Other”

2154

3197

3095

3085

3073

Total Disappearance

4305

5997

5835

5885

5863

End Stocks

342

443

605

433

601

COTTONSEED fob points
Prices 6-17-11Bid / Offer / TradeYr Ago
Southeast($/ton)

No. Carolina

Spot

350b  /   355o  /   350t

220t

(as ginned)

OND

240b  /   250o  /   240-247t

142o

So. Carolina

Spot

350b  /   355o

n/a

(as ginned)

OND

245b  /   250o

145o

Georgia So.

Spot

350b  /   355o

222-224o

(as ginned)

OND

245b  /   250o

142o

Mid-South($/ton)

Memphis No.

Spot

370-378o  /   370t

240t

 

Jn-Jly

380o

n/a

(as ginned)

OND

280-290o

161t

MO Bootheel

Spot

378o

240o

 

June

280o

n/a

(as ginned)

OND

285-290o

n/a

Southwest($/ton)

West Texas

Spot

390-395o

250o/t

 

Ag-Sp

395t

255o

(as ginned)

OND

330-335o

168-170o

Far West($/ton)

Arizona

Spot.

420o

300o

Cal. Corc. N

Spot

465-470o

340-345o

& Stockton

JAS

470o

350o

 

OND

365o  /   365t

248t

 

Clock

375o

n/a

Specially Processed Products($/ton)

Easi Flo ™ Courtland, AL

Spot

415o

264o

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

COTTONSEED dlvd. points
Prices 6-17-11DumpHopperLive FloorRail
Northeast($/ton)

W. New York

Spot

407o

 

 

 

 

OND

307o

   

SE Pennsylvania

Spot

390o

 

 

 

 

OND

290o

   
NE Ohio

Spot

407o

   

 

OND

307o

 

 

 

Midwest($/ton)

MI (Grand Rpds.)

Spot

417o

 

 

 

 

OND

317o

 

 

 

MN (Rochester)

Spot

 

433-438o

439-442o

 

 

OND

 

340-343o

345-350o

 

WI (Madison)

Spot

 

430-435o

435-440o

 

 

OND

 

337-340o

342-345o

 

Southwest($/ton)

Texas / Dublin-

Spot

 

415o

 

 

Stephenville

JAS

 

422o

  
Rail - fob track points($/ton)

Laredo TX

(Mid-Bridge)

Spot

 

 

 

No quote

California

Spot

 

 

 

460o

 

OND

   

365o

Idaho (UP)

Spot

 

 

 

455o

 

OND

 

 

 

350b 360o

WA/OR (BN)

Spot

 

 

 

463o

 

OND

 

 

 

368o

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.


COTTONSEED MARKET: The main feature of all cottonseed markets continues to be concern over new crop because of hot and dry weather in West Texas and southern Georgia. Consecutive days of weaker corn futures at mid-month has put a bearish tone in the Mid-South and Southeast markets. Cottonseed holders were much more eager sellers this week. Offers were lowered and sellers were willing to accept bids, which hadn’t been the case over the past several weeks. It appears that prices have climbed high enough to ration demand and now given softness in other ingredients markets, cottonseed sellers are interested in keeping pace with other ingredient price changes and not choke off demand completely.

The mid-June crop report shows that planting is close to the average pace, yet squaring is varied state to state. With the release of the first cotton crop conditions, results were well below last year as suspected. The crop at this time last year was rated 62% as good to excellent, but this year only 28% falls into those categories. Texas had the lowest rating with 44% in the poor to very poor column. Only one-fifth of the Texas crop was in the good to excellent category. If the weather pattern holds, over half of the crop could be in the bottom two classifications before the end of the month.

West Texas continues to be the leading market with price increases. Unfavorable growing conditions for all crops has kept cottonseed demand strong in the state as dairies have few options to replace the cottonseed used in rations. Demand at such price levels remains limited and end users continue to buy only hand-to-mouth. New crop offers are difficult to find, as gins are not willing to over commit and resellers do not want to make a commitment as there could still be more upside price risk.

Nearby offers in the Southeast are steady with last week, but there is a weaker tone in the market as nothing has traded. Recently, sellers were more interested in hearing bids. If buyers stay out of the market and nothing trades, it is possible for more downside price risk. There has been an increase in new crop buying interest. Dairies appear more willing to take on some ownership, as comparatively steady milk prices and lower corn prices suggest better profitability.

The Mid-South market showed the most willingness to trade at lower levels this week. Buyers have exited the market as lower offers were not being countered. It looks like some end users are willing to wait and see if the nearby has the potential to move lower. Because prices are climbing higher in West Texas, it appears that the down side risk for the Mid-South is limited. Eventually spreads should widen enough to result in supplies moving into western markets. New crop inquiries are up with some dairies looking at booking forward, but trading is limited due to the lack of gins willing to sell at bid levels.

As of the middle of the month, the offered range in the California market shifted down and then back up with limited trading. Nearby availability of supply continues to be an issue in the market. Rail car shipments have been slower than anticipated as a few destinations have run out of supply. Unless there is a significant change in the origin of cottonseed being supplied to this market, logistical problems supplying California in a timely fashion will continue to be an issue to pressure prices higher. End users are turned off to cottonseed at these nearby price levels, yet there are a few buyers that continue to pay this high prices. The new crop trading that has taken place is only on small volumes.

COTTONSEED BALANCE SHEET: The old crop balance sheet for USDA was unchanged. The production outlook for new crop was dropped 345,000 tons, which was the largest change this month. The Feed, Seed and Other category was lowered 195,000 tons and the crush was decreased 150,000 tons. The changes on the demand side of the balance sheet offset the drop in production, so ending stocks were left unchanged.

The Cottonseed Digest’s old crop balance sheet had a 20,000-ton drop in exports on lighter demand. It appears that lofty prices are limiting the potential for any additional sales late in the season. Also some countries that would have bought from the US are going to Australia to satisfy their demand for cottonseed.

New crop production was reduced 305,000 tons. The drought situation in the Southwest and southern Georgia will result in higher abandonment and yields will be hurt due to the heat even for irrigated fields. There is potential for more downward adjustments if conditions do not improve. Imports are unchanged at zero, because there has yet to be confirmation of cottonseed being imported.

On the demand side of the balance sheet, the crush was pared back 50,000 tons, as a tighter seed supply outlook means that crushing margins are apt to be less attractive. Currently there is ample supply of cottonseed oil, so until there is an improvement noted in demand, oil mills are not expected to be overly aggressive in maximizing their crush. The Feed, Seed and Other Category was lowered 200,000 tons due to tighter supply. Lofty prices similar to current levels will likely be used next year to limit the usage of cottonseed in dairy rations.










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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