PCG EMAIL SERVICES: AGRIMONEY.COM - Cotton prices rise on fast US exports, slow sowings
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Fri May 29 15:46:26 CDT 2015
AGRIMONEY.COM - Cotton prices rise on fast US exports, slow sowings
17:59 UK, 29th May 2015
Cotton futures took their gains in two sessions nearly to 6% at one point after the US posted unexpectedly strong export sales of the fibre, adding to price support from Indian heat and US wetness.
US Department of Agriculture said that the US sold 117,500 running bales of cotton last week for 2014-15 –"up 98% from the previous week and 86% from the prior four-week average".
A further 57,300 running bales of cotton sales were reported for delivery next season, which starts in August.
The data - which took total US cotton sales commitments for 2014-15 to 10.44m running bales, 6.0% above the actual export volumes the USDA has forecast for the whole season – were termed "supportive" by analyst Louis Rose at the Rose Report.
Mr Rose also flagged actual US exports of 339,200 running bales of cotton last week, ahead of the pace needed to meet the USDA forecast.
"Export shipments will need to average approximately 178,000 running bales per week in order to hit the target," Mr Rose said.
Slow Texas plantings
The data come amid US production concerns too, with sowings in Texas, the top producing state, running well behind average rates.
As of Sunday, Texas growers had planted just 29% of their cotton, compared with an average of 50% by then, USDA scouts said, citing "continued rainfall" for the delay.
"It's the intensity of the rain in the Texas that is delaying that crop," said Keith Brown, at Georgia-based broker Keith Brown & Co.
Furthermore, the rainfall might cut the ability to use fertilizers and sprays and on what crop had been planted, with fieldwork tricky and heavy rains likely to wash away applications.
"It's getting so late now, they may not fully use all the inputs," Mr Brown told Agrimoney.com.
Prices are also getting support from a heatwave in India, the top cotton growing country, where monsoon rains are not expected to kick in until next late June.
However, Mr Brown also noted that moisture could bring some yield benefits to southern US crops too, and urged caution on prices.
"I don't think we're going to 70 cents a pound in July," he said.
New York cotton for July stood at 65.61 cents a pound in late deals in New York, 2.0% higher on the day, but below a high of 66.59 cents a pound reached earlier.
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