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    Cotton Marketing News

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    Brittany Etheridge
    The document summarizes the outlook for the 2019 US cotton crop and market. It notes that USDA estimates the 2019 crop at 22 million bales, but initial producer surveys in August could revise this higher or lower. A larger crop would require strong exports and demand to avoid low prices. Exports so far are below projections and China remains a key uncertainty. Prices have risen recently but may fall again depending on the August reports and export demand from China.

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    Cotton Marketing News

    Uploaded by

    Brittany Etheridge
    50 views1 page
    The document summarizes the outlook for the 2019 US cotton crop and market. It notes that USDA estimates the 2019 crop at 22 million bales, but initial producer surveys in August could revise this higher or lower. A larger crop would require strong exports and demand to avoid low prices. Exports so far are below projections and China remains a key uncertainty. Prices have risen recently but may fall again depending on the August reports and export demand from China.

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    Cm n 07242019

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    The document summarizes the outlook for the 2019 US cotton crop and market. It notes that USDA estimates the 2019 crop at 22 million bales, but initial producer surveys in August could revise this higher or lower. A larger crop would require strong exports and demand to avoid low prices. Exports so far are below projections and China remains a key uncertainty. Prices have risen recently but may fall again depending on the August reports and export demand from China.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    50 views1 page

    Cotton Marketing News

    Uploaded by

    Brittany Etheridge
    The document summarizes the outlook for the 2019 US cotton crop and market. It notes that USDA estimates the 2019 crop at 22 million bales, but initial producer surveys in August could revise this higher or lower. A larger crop would require strong exports and demand to avoid low prices. Exports so far are below projections and China remains a key uncertainty. Prices have risen recently but may fall again depending on the August reports and export demand from China.

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    REPRESENTING COTTON GROWERS THROUGHOUT ALABAMA, FLORIDA, GEORGIA, NORTH CAROLINA, SOUTH CAROLINA, AND VIRGINIA

    COTTON MARKETING NEWS


    Volume 17, No. 11 July 24, 2019
    201919
    An even larger US crop combined with less than expected exports,
    Sponsored by would be a recipe for continued low prices. On the other hand, a
    22 million bale crop or less combined with strong exports would
    be a recipe for a price recovery.
    A Brief and Simplistic Updated Look at the Outlook
    China and Foreign Situation
    USDA’s August crop production and supply and demand estimates Prices have improved the past couple of days due to renewed
    will be released in a couple of weeks. This will be the first optimism over the US-China trade talks. World demand and
    production estimates of the 2019 crop year based on actual exports will drive prices, no doubt. If, in fact, we are to do 17
    producer survey. million in exports, it seems China has to be a major part of that.

    US Crop Reports suggest that there is growing uncertainty about the China,
    The 2019 US cotton crop is currently estimated at 22 million India, and Pakistan crops. This too will factor in to the demand for
    bales—3.6 million bales or 20% higher than last season. Will the US cotton. Forward export sales of the 2019 crop already total 4.5
    first producer-based projections be higher or lower than 22 million bales or 26% of the USDA estimate. Of this total, sales to
    million bales? China total 1.53 million bales thus far.

    The 2019 crop got off to a rough start but current conditions are Price (and LDP) Situation
    generally very good and most observers seem to think the crop December futures have reached as low as 62 cents but have
    will lean higher rather than lower. But there are still many recovered on news of renewed US-China trade talks and an
    unknowns—actual acres planted due to delay, remaining crop optimistic outlook. It is uncertain if this will hold. The USDA
    conditions, and final acres harvested and yield. August producer survey based numbers will also be important.

    As of July 21, the crop is 10% poor to very poor compared to 15%
    the week before. The crop is 60% good to excellent. Texas is at
    58% and Georgia 60%. The least favorable conditions are reported
    for Kansas, Missouri, and North Carolina.

    If the US crop gets larger, that’s not altogether a bad thing (it’s a
    good thing from a farm level production standpoint)—but it would
    place more emphasis on strong demand and strong exports.

    Exports
    USDA currently projects 17 million bales in exports for the 2019
    crop marketing year. Under present circumstances, this seems a
    high and optimistic estimate. SOURCE: DTN, July 24, 2019.

    Exports for the soon to be completed 2018 crop marketing year


    have been lowered from an earlier projected 15 million bales to The current “floor” is 62 to 63 cents. “Resistance” is at 64 to 65.
    the present 14.5 million bale estimate. Further, exports do not If we can manage to break 65 cents, we set our sights next on 68.
    presently appear on pace to even make the 14.5 estimate. So, a
    further revision downward is possible. Talk is starting to stir about possible LDP/MLG for the 2019 crop.
    An LDP or MLG is generated when the Far East (FE) Adjusted World
    Given the present weakness in demand and exports and the Price (AWP) is less than the loan rate (52 cents for the 2019 crop).
    uncertainty of US-China trade talks, 17 million bales for the 2019 Based on current price relationships, an LDP/MLG can be expected
    crop year would be very good but seems unlikely. if prices (futures) fall below roughly 60 cents.

    With a larger crop expected and the US being the World’s largest
    exporter, higher exports are sometimes assumed just because Cotton Economist- Retired
    higher export supply will be available. But that assumes no Professor Emeritus of Cotton Economics
    changes or barriers in the way of market access and competition
    and also assumes continuing good demand.

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