The information contained herein is provided by Plains Cotton Cooperative Association (PCCA), a farmer-owned cotton marketing cooperative headquartered in Lubbock, Texas. It is for general informational purposes only and is obtained from sources believed to be reliable; however its accuracy and completeness is not guaranteed by PCCA, and PCCA offers no representations or warranties of any kind in providing this information. Nothing contained herein is intended, or should be construed, as advice or guidance for the marketing of cotton.
October 19, 2018
Weather Conditions, Harvest Concerns
- Hurricane Michael’s Impact
- Rain, Rain and Some More Rain
- Demand Remains Slugglish
Last Friday December 2018 futures bounced up 156 points to settle at 78.37 cents per pound as traders continued digesting damage reports from Hurricane Michael and forecasted rains and freezing temperatures in Texas, Oklahoma, and Kansas. With all of the bad news coming in, one might have expected the market to get another boost. The high for the week of 79.16 cents was set early in Monday’s session and the market ended closing on Thursday at 78.05.
Hurricane Michael’s Impact
Pictures of damage caused by Hurricane Michael began trickling in on social media over the weekend and continued the rest of the week. Southeast Alabama and the southwestern region of Georgia were ready for harvest as Michael came ashore. With the majority of cotton open and defoliated, the crop was at its most vulnerable to extreme winds and rain. For those in southeastern Alabama, southwestern Georgia and the Florida panhandle the damage was truly devastating. One person likened the damage to a “55-mile-wide tornado” tearing through the heart of Georgia’s cotton crop.
Continued Rain in Texas, Oklahoma and Kansas
Texas, Oklahoma, and Kansas producers experienced their own set of issues this week as rain and cold temperatures blanketed the area. Lubbock’s rainfall for the month-to-date of October is approaching 4”. Other areas in Texas, Oklahoma, and Kansas have received much more. Producers are continuing to wait for dryer conditions so that harvest can continue. The National Weather Service shows we may get a break on Saturday, but according to the 10-day forecast chances of rain will continue through next week. Yield and quality concerns continue to mount with this extended period of rain and cold.
Demand Remains Slugglish
This week’s Export Sales report for the week ending October 11 showed net sales of 32,700 bales, 55 percent of the average for the prior four weeks. New sales of 65,700 bales was offset by cancellations totaling 33,000 bales. China accounted for 18,500 bales of cancellations for 2018-19 marketing year. As in previous weeks, it appears the majority of cancellations from China are being rolled out of the current marketing year and into the 2019-20 marketing year as new sales for next marketing year to China increased 17,600 bales. Export shipments at 135,200 bales were down 20 percent from the average of the prior four weeks.
In the week ahead:
- Crop Progress and Condition will be released Monday at 3:00 p.m. Central Time.
- The CFTC Cotton On-Call report will be released Thursday at 2:30 p.m. Central Time.
- The Export Sales report will be released Thursday at 7:30 a.m. Central Time.
- The CFTC’s Commitments-of-Traders will be released Friday at 2:30 p.m. Central Time.
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