Cottonseed Market Prices
COTTONSEED Intelligence Monthly
Cottonseed Market: The year 2020 began with more of a “thud” than a “bang” as December cottonseed trading was quiet. A late-in -the-month Thanksgiving lulled the market into a Christmas and New Year’s doldrums. Once again the primary market driver was West Texas, where seed strengthened a few bucks over the month in the face of weak sup-ply. There as well, however, the story remained light trading with wide bid/ask spreads. It has been rumored that a sizable number of Arizona dairymen may not yet have covered their seed requirements, but West Texas seed that earlier in the season was trucked west now commands a premium. Arizona local prices have reacted accordingly. California has felt those reaching effects, with stable to marginally higher prices over the month. Rail markets in California were sparsely traded, with offers hard to find, while Idaho rail remained stable but quiet. In the Mid South the market remains hard to call as the bid/ask spread has been consistently as wide as$30 over the month, thin volume remains there as well. North Carolina and South Georgia markets both strengthened, more as a reaction to firming across the country than export demand (which has been unimpressive). What were near-record spreads between the East Coast and Lubbock North (as well as Mid South to Lubbock North), have narrowed noticeably.
Seed prices rose in December for South Georgia from lows of $135/ton early in the month to $165 (nearby), with North Carolina sliding up from the low $140’s to $170/ton. West Texas spot seed opened the month in the $260’s before trading into the $290’s. Corc North spot fuzzy remained virtually unchanged hovering around $315-325. Arizona strengthened from $290-$300 up to $310 (and maybe traded at $315 if rumors are true). Mid South trading experienced wide spreads but seemed to strengthen around $10 or so. Offers currently sit around $200/ton. Increased volume in January as traders return from the holidays should lend more clarity as to where the market actually should be.
COTTONSEED FUTURES: Cotton prices continue to find support from both fundamental factors and an improved technical outlook. The nearby contract, March, remains well supported and will likely get a minor boost from index rebalancing in January. However, that will be insignificant, if recognized at all, and the market should continue to find support from the upcoming Phase One trade agreement that should result in additional cotton being sold to China. Smaller certificated stocks are also fostering a bit of a bullish sentiment for some traders. However, with potential China sales on the horizon, it might be a false economy to spend the cost of certification at this time. If the trade deal does not work, then we would expect certificated stocks to increase rather quickly before March delivery.
COTTONSEED HARVEST: USDA’s final Crop Progress report of 2019 on December 9 had cotton harvest nationally at 89 percent completed, without comparison to the five-year average. Arkansas and Louisiana were reported 100 percent complete, with Kansas and Texas the furthest behind at 82 percent each. Ginnings, however, are substantially ahead of the last few years. Bales ginned this crop year are over 15.6 million, 22 percent ahead of the three-year average of 12.8 million bales ginned. Texas leads the way at 5.4 million bales, with Georgia a distant second at 2.2 million bales ginned. The next Cotton Ginnings report is to be released January 10.
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 is forecasting US all cotton production at 20.1 million bales in the January report, 60,000 bales be-low last month but, if realized, would be 1.8 million bales above last year. Increases in Virginia and Alabama tempered reductions in Missouri, Tennessee, Arkansas and Louisiana. The all-cotton yield is forecast to average 773 pounds per acre, which is down two pounds from last month and, if realized, would be 91 pounds below last year. Upland production is forecast at 19.4 million bales, which was down 60,000 from last month and American-Pima production is forecast at 726,000 bales, which was unchanged from last month.
US export sales for the week ending December 26 netted 261,500 (246,200 Upland, 15,300 Pima) bales, a 69 percent increase from the previous week and 20 percent increase from the four-week average. There were 20,300 (19,400 Upland, 900 Pima) bales sold for new crop position. For current crop, there were 293,600 (227,900 Upland, 15,700. Pima) bales in new sales and 32,300 (31,800 Upland, 500 Pima) bales cancelled. China made up 22,000 of the upland cancellations. For current crop, the most active buyers were Vietnam 105,200 (101,300 Upland, 900 Pima), Turkey 38,300 (36,100 Upland, 2,200 Pima), Pakistan 34,100 (32,800 Upland, 1,300 Pima), and Malaysia 16,200 (16,200 Upland, 0 Pima) bales. There were 230,800 (224,500 Upland, 6,300 Pima) bales shipped. Shipments remain about 15 percent ahead of last year and 28 percent ahead of the five-year average. Commitments remain seven percent ahead of last year.
Read the full Cottonseed Market Prices: January 2020.
Cottonseed Intelligence Monthly is published monthly.
Phone: 901-766-4667. E-mail: [email protected]nullinformaecon.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 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, 7900 International Drive, Ste 650, Minneapolis, MN 55425. © 2018 Informa Economics IEG, All Rights Reserved.