Cottonseed Market Prices
COTTONSEED Intelligence Monthly
Cottonseed Market: IEG Vantage’s forecast is for cottonseed prices to remain mostly rangebound nearby with mixed regional eccentricities. While significantly more ginning has taken place year to date in 2019 com-pared with the last three years, the focus has been on how much remains to be ginned and for how much long-er the gins will be running. The biggest upside price risk continues to be found in West Texas, where prices have strengthened and spreads have widened between seed there and the Mid South / Southeast. The less expensive seed from West Texas that was working into Arizona earlier in the year dried up once seed yields were noticeably lower. Export demand in the South Georgia market has been weak or unnoticed, and prices in North Carolina have remained stable. If yield issues persist in West Texas prices are forecast to strengthen, there is little downside to the market there currently. If Southeastern sellers can find freight expect those near-record spreads from Georgia/North Carolina to the Mid South to West Texas to narrow.
Most of November remained fairly quiet until the week prior to Thanksgiving, when prices began firming in West Texas and some strength earlier was found in California. Tepid trading remained in some markets, with Memphis North remaining barely thin enough for a few quotes. Cotton harvest is slightly ahead of average for the week ending December 1, with USDA reporting 83 percent has been picked, compared with 78 percent last year and the five-year moving average of 81 percent. Cotton harvest was behind only marginally in Arkansas, Tennessee, and Virginia. The November 25 Cotton Ginnings report continued to have 2019 ginnings markedly ahead of 2016-18. USDA will release another Cotton Ginnings report on December 10 along with Crop Production at 12:00pm EST. As far as the seed trade, Memphis North was thin throughout November with prices re-ported between $180 and $185. West of River for spot was offered from $170 to $185 for the month. South Georgia showed little change the last few weeks, trading as low as $135 / ton and offered as high as $145. North Carolina traded slightly higher, in the low $140s for the last few weeks, but it was mostly offered the same as South Georgia. While West Texas spot trucks traded as low as $235 per ton early in the month, the last trading week before Thanksgiving experienced strengthening into the $260s. Corc North spot fuzzy was offered from $315 to 345 and. Arizona spot was offered mostly between $290 to $300.
New crop North Carolina seed is unchanged from the November Forecaster, hovering around $150 per ton. West Texas spot trading at $260 is on the upper edge of last month’s forecast, and the rest of the month was within IEG Vantage’s forecasted range. IEG Vantage’s forecasted range for November was between $160 and $190 in the Mid South, where the projected range held but the Boot Heel put upward pressure on those numbers. The Mid-South forecast by IEG Vantage was in-line for West of River. California new crop Corc North and Arizona both traded spot in-line with forecasts.
COTTONSEED BALANCE SHEET: IEG Vantage adopted USDA’s 2019/20 forecast for cottonseed supply and demand released November 13. Beginning stocks forecast was unchanged for the crop year beginning August 1 at 477 thousand tons. USDA forecasts production down to 6.5 million tons, a decrease of four percent from 6.8 million tons last month, but still 15 percent higher than 2018/19 production and marginally above 2017/18. IEG Vantage USDA’s cotton production forecast at 20.8 million bales, which is 888,000 below USDA’s October forecast. The all-cotton yield is forecast at 799 pounds per acre, down 34 pounds from USDA’s October forecast. The major change was in Texas where the yield fell from 624 pounds per acre to 568 pounds per acre, putting the Texas crop 700,000 bales smaller than USDA’s October report, which was forecast at 7.82 million. If realized, that yield would be the lowest in Texas since the 2015/16 crop year, 188 pounds less than last year and down almost 150 pounds from the five-year average. Arkansas increased 70,000 bales and South Carolina increased 30,000, making up a slight portion of the losses in Texas. Though down modestly from the USDA October report, production still is 2.45 million bales larger than last year. IEG Vantage’s December cotton production forecast has not yet been released.
US export sales for the week ending November 21 were better than many expected at a net 290,700 (281,500 Upland, 9,200 Pima) bales. For current crop, there were 388,200 (379,000 Upland, 9,200 Pima) bales in new sales and 37,500 upland bales canceled. Mexico 67,500 and China 29,900 were the two countries to cancel. New crop realized 23,800 baes of upland cotton sold. The best net buyers for US cotton were Vietnam 74,500 (73,600 Upland, 900 Pima), Turkey 69,400 (67,800 Upland, 1,600 Pima), Bangladesh at 46,400 upland, and Pakistan at 39,900 upland. Exports totaled 195,600 (184,400 Upland, 11,200 Pima) bales. Commitments are now six percent higher than last year compared with five percent higher the previous week and exports are now 17 percent ahead of last year and 40 percent ahead of the five-year average.
Read the full Cottonseed Market Prices: November 2019.
Cottonseed Intelligence Monthly is published monthly.
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