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2011 Cottonseed Prices: March

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

USDA

Mar./ USDAMar./ USDAMar./ CSD
 

2007/08

2008/09

2009/10E

2010/11F

2010/11F

Beg. Stocks

489

643

514

342

342

Imports

3

0

24

0

0

Production

6589

4300

4149

6191

6210

Total Supply

7080

4943

4687

6533

6552

Crush

2706

2240

1900

2500

2500

Exports

599

191

291

300

300

Feed, Seed, & “Other”

31321999215432903245

Total Disappearance

64374429430560906045

End Stocks

643

514

342

443

507

COTTONSEED fob points
Prices 3-18-10Bid / Offer / TradeYr Ago
Southeast($/ton)

No. Carolina

Spot

218o

188

 

Ap-Ag

220b / 225o

n/a

(as ginned)

OND

166-168o

n/a

So. Carolina

Spot

218o

194o

 

Ap-Ag

220b / 225o

n/a

(as ginned)

OND

165b / 168o

n/a

Georgia So.

Spot

218o / 215-216t

190o

 

Ap-Ag

220b / 225o

n/a

(as ginned)

OND

168-170o

n/a

Mid-South($/ton)

Memphis No.

Spot

235b / 240-245o / 238-240t

195-197t

 

Ap-Sp

240b / 242-245o

198t

(as ginned)

OND

195b / 202o

160o/t

MO Bootheel

Spot

240o

200o

(as ginned)

OND

202o

160o

Southwest($/ton)

West Texas

Spot

260b / 265-268o / 263t

195-200t

 

Ap-Sp

273-275o

197-200o

(as ginned)

OND

215b / 220-225o

160o/t

Far West($/ton)

Arizona

Spot.

310b / 320t

250o

Cal. Corc. N

Spot

330-332o / 328-330t

275t

& Stockton

Ap-Sp

335b / 342-345o

275-280o

 

OND

290b / 310o

245-250o

Specially Processed Products($/ton)

Easi Flo ™ Courtland, AL

Spot

265o

230o

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

COTTONSEED dlvd. points
Prices 03-18-11DumpHopperLive FloorRail
Northeast($/ton)

W. New York

Spot

268o

 

 

 

 

Ap-Ag

276o

   

SE Pennsylvania

Spot

251o

 

 

 

 

Ap-Ag

259o

   
NE Ohio

Spot

268o

   

 

Ap-Ag

276o

 

 

 

Midwest($/ton)

MI (Grand Rpds.)

Spot

278o

 

 

 

 

Ap-Ag

286

 

 

 

MN (Rochester)

Spot

 

298o

309o

 

 

Mr-Ag

 

309o

315o

 

WI (Madison)

Spot

 

289o

299o

 

 

Mr-Ag

 

299o

308o

 

Southwest($/ton)

Texas / Dublin-

Spot

 

282o

 

 

Stephenville

Ap-Sp

 

287o

  
Rail - fob track points($/ton)

Laredo TX

(Mid-Bridge)

Spot

 

 

 

310o

 

AMJ

 

 

 

310o

California

Spot

 

 

 

No quote

Idaho (UP)

Mr-Sp

 

 

 

312b 317o

 

OND

 

 

 

280b 285o

WA/OR (BN)

Spot

 

 

 

325b 328t

 

Ap-Sp

 

 

 

325b 332o

 

OND

 

 

 

290o 305o

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: With the limit down and up days of grain futures recently, markets are not well defined due to the lack of buying interest and limited trading. For example, the May corn contract was down more than a dollar per bushel from the contract high that was established earlier in the month. Futures price volatility has kept end users from buying in anticipation of a similar change in cottonseed prices. But, cottonseed has held its value. Right after the down days, there were a couple sellers willing to show offers a few dollars lower, but not very much traded. Since that week of dramatic futures volatility, cottonseed offers were brought back up, but this did not result in any more trading.

The market appears to be in a healthy balance between price and supply for this time of year. Given high hay and other ingredient prices, cottonseed provides a reasonable value for dairy end users. Because of the recent grain price fluctuations, there are concerns that dairy buyers might find a better value from some other feed ingredients and end up booking forward requirements. They could fill their ration with other ingredients and end up limiting their cottonseed usage. This would be a potentially bearish scenario for cottonseed. For this to happen, prices of other feed ingredients would need to remain competitive. It may require more time before such a situation will play itself out. New crop cottonseed supplies would have to meet forecast expectations to provide an outlook for sufficient supply longer term. Current dry conditions in Texas are seen as price supportive. Southeast markets were quiet with some nearby trades done on bids. The North Carolina nearby offer is $10/ton above the level last month. The price spread between the nearby and summer months has contracted a couple dollars, yet end users are reluctant to buy. New crop trading remains lackluster without gin participation. New crop offers have edged lower. The outlook for planting looks good with mild temperatures and abundant moisture. The spot price is expected to gradually climb higher as grain futures have rebounded.

The Mid-South market continues trading higher even with nearby end user demand weak. Sellers have the upper hand in the market and are holding firm on offers. The premium for the summer months is only several dollars higher, while the 5-year average is over $20/ton. It seems like there really isn’t much supply in the region to be had, so expectations are set for the more upward price moves. New crop cottonseed price ranges are not likely to move much until the market has a better feel for new crop supply. Recently the interest in new crop has backed off.

West Texas’ month over month nearby price increase was $18/ton, which was the largest increase compared to other regions. This increase in prices will likely result in some lost demand from local feedlots. Sellers were not fazed by the drop in grain Futures prices as offers were kept unchanged. Regarding dairy buyers, they were frustrated that cottonseed prices didn’t drop along with grain futures and other ingredients like DDGS, to give them a buying opportunity. Summer offers were raised $16/ton compared to last month, but not much trading has been reported. If West Texas doesn’t get a good rain in the next few weeks, summer prices might have more increases. For now new crop is a non-issue, as gins are not willing to offer and end users are in a wait-and-see mode.

Nearby trading moved up roughly $15/ton since the last installment. Improved milk prices have certainly put dairies in a better financial situation compared to a few months ago. Buying interest still is light, but a few nearby fill-in loads are trading each week. Dairies haven’t shown as much interest in forward contracts recently. Inclusion rates are not expected to be raised dramatically at this time. But, there is potential for some stronger cottonseed demand provided dairy economics rebound. For the next several weeks, prices are likely to hold to a similar range.

COTTONSEED BALANCE SHEET: USDA’s balance sheet had a 50,000-ton reduction to exports. Meanwhile, the Feed, Seed and Other category were raised by the same amount. January’s exports fell below levels shipped the past two months and below last year’s level. Based on the past 5 years of data, by this time 48% of the cottonseed that will ship has shipped. This year could be different due to the larger crop in Australia as some export buyers will satisfy their demand with Aussie seed.

The Cottonseed Digest’s balance sheet lowered exports 40,000 tons due to the outlook for lighter exports during the last half of the crop year. Recently in the US, there has been less buying interest. Beyond March, export sales are lighter and unless new demand shows up, as it appears that shipments for the balance of the crop year will be less than the first half. The recent drop in corn futures has provided a buying opportunity of other feed ingredients. This could resulted in end users not needing as much or any more cottonseed than what they currently have booked. This is why the tonnage removed from the export category was added to ending stocks. Ending stocks are within several tons of the 5-year average level. There is still potential for ending stocks to grow. If oil mills slow crushing and don’t sell their supply into the feed market based on new crop concerns, ending stocks will increase. For ending stock to drift lower, feed










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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