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March 21st, 2013
Cotton Futures – The longest cotton rally in four years and a lingering drought in the southern Great Plains are forcing farmers in the U.S., the world’s biggest exporter, to reconsider a shift to other crops.
Planting may total 11 million acres, 10 percent more than a Feb. 22 government forecast of 10 million, said Jordan Lea, the chairman of Eastern Trading Co., an exporter in Greenville, South Carolina. Prices are up 37 percent from a 31-month low in June and heading for a fifth monthly gain, the longest since July 2009. Corn fell 3.4 percent since the end of October.
The price surge was the “number one” reason “for me switching back to cotton,” said Randy McGee, 35, who farms 1,200 acres in Idalou, Texas. He’s ditching plans to sow corn and sorghum on 300 acres of non-irrigated land that he now plans to use for cotton. “December grain and corn prices aren’t looking too promising. I’m sending my seed back.”
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March 14th, 2013
Cotton futures rose to a 10-month high in New York on stronger U.S. exports stoked by Chinese demand and on speculation planting may decline as the fiber competes with corn and soybeans for acreage.
U.S. exports of upland cotton since the start of August reached 6.77 million bales as of March 7, up from 5.59 million bales a year earlier, the U.S. Department of Agriculture reported today. Weekly net sales of upland cotton were 187,561 bales, up from 150,083 bales in the week through Feb. 28, USDA data show.
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January 29th, 2013
Cotton futures traded in China’s Zhengzhou climbed the most in a year after government purchases reduced the supply in the local market.
Cotton for May delivery advanced 2.6 percent to 20,385 yuan ($3,273) a metric ton on the Zhengzhou Futures Exchange, the biggest gain at close since Feb. 1, 2012. The most-active contract is headed for a 7.6 percent gain this month, the most in two years.
The Chinese government bought record quantities of cotton in the last two years to protect domestic farmers, according to the China Cotton Association. The country stockpiled 5.83 million tons from the current harvest, about 85 percent of the total output, as of Jan. 22, the group said. Purchases in 2011 were 3.12 million tons, the government said.
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December 26th, 2012
Cotton futures rose to a nine-week high as exports surged from the U.S., the world’s biggest shipper. Sugar and coffee advanced, while cocoa and orange juice fell.
In the four weeks that ended Dec. 13, U.S. export sales of upland cotton soared sixfold from a year earlier, Department of Agriculture data showed on Dec. 20. Cotlook Ltd., the publisher of a benchmark price index, raised its forecast for global consumption, citing increases in countries including India.
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November 2nd, 2012
Cotton Futures – Cotton stockpiles in China, the world’s biggest importer, are set to climb to about 9 million metric tons this season, enough to cover the country’s deficit for the next six years, according to Allenberg Cotton Co.
Inventories are rising as the government boosts purchases to support domestic prices and lift farmer incomes, Joe Nicosia, chief executive officer of world’s largest cotton trader, said at a conference in Hong Kong today. The country may buy 5 million tons for reserves this year, up from 3.2 million tons a year earlier, he said.
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October 16th, 2012
Cotton futures rallied as traders closed out bets that prices would fall as U.S. supplies reached a 17-year low.
Cotton futures for December delivery, the front-month contract on the ICE Futures U.S. exchange, rose 2.52 cents, or 3.5%, to settle at 74.86 cents a pound, the highest settlement since Sept. 14 but down from an intraday high of 75.17 cents a pound.
“There are virtually no stocks against the ICE contract, and at this point in the harvest it’s too early to see a lot of cotton coming on to the [ICE trading] board,” said Andy Ryan, a senior analyst at INTL FCStone in Nashville, Tenn. “It’s fear of a supply squeeze.”
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September 20th, 2012
Cotton futures ended up slightly on Wednesday, lifted by bargain hunting and a rebound in other agricultural commodities after the previous session’s steep selloff. Cotton’s resiliency – amid a plunge of around 4 percent in crude oil futures – suggested investors are buying while prices are sharply below those seen earlier this year, analysts said.
The market’s strength “might be more a reflection of demand starting to generate at these lower levels”, said Stephen Platt, analyst at futures brokerage Archer Financial Services. “As the harvest progresses here, we will see how the quality of the crop shapes up,” Platt said.
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September 4th, 2012
Cotton Futures – Cotton warehouses from China to Australia are bulging with the biggest-ever glut, a year after record prices spurred farmers to expand output.
Harvests will exceed demand for a third year, swelling stockpiles by 10 percent to 74.67 million 480-pound bales by August, the U.S. Department of Agriculture estimates. Inventories in China, the biggest user, will triple over two years to a record as domestic demand slumps to the lowest since 2005, USDA data show. Cotton may drop 10 percent to 67.87 cents a pound by the end of the year, according to the average of 20 analyst and merchant estimates compiled by Bloomberg.
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August 28th, 2012
Cotton futures fell on concern that demand will ebb amid signs of slowing economies. Orange juice increased.
Japan’s government today downgraded its assessment of the world’s third-biggest economy for the first time in 10 months, the Cabinet Office said in a monthly report released in Tokyo. Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” according to the report.
“A slower world economy has a negative impact on cotton, as purchases can be delayed, unlike food commodities,” Sid Love, the president of Joe Kropf & Sid Love Consulting in Overland Park, Kansas, said in an e-mail.
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July 28th, 2012
Cotton Futures – Plexus Cotton Limited reported that New York (NY) futures ended the week slightly lower, as December dropped 124 points to close at 71.39 cents.
The cotton market weakened earlier this week after renewed jitters about Spain and Italy led to another “risk off” move by money managers that put pressure on the entire commodity complex, including drought-stricken corn and soybeans.
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