Cotton exports push prices, Dec futures inching towards 57 cents
22 Jul '06
3 min read
As has been the case since October, the vast dryland acreage of West Texas remains dry. Lubbock County is a mixture of dryland and irrigated acreage. Cotton in counties north of Lubbock is regarded as irrigated while the area to its south is dryland. The fully irrigated acreage is developing very well, but fields with only limited water supplies are beginning to stress as temperatures are also high enough to limit pollination. By all accounts the Texas crop, eight million bales last year, is slightly below five million at this point-and with more planted acreage this year.
The region will experience a cool spell this week as temperatures fall to daytime highs of only 90 to 95. However, with no rain in sight, another two to three weeks without moisture will have the Texas crop falling below 4.5 million bales with further drought dropping the crop to only four million bales.
The 100 plus temperatures this past week limited pollination in much of the Delta. Additionally, dryland acreage in Arkansas, Louisiana, Mississippi, and most of Alabama is blooming at the top of the plant, signaling the plant has finished production for the year.
With the Texas crop below five million bales, cotton futures are attempting to firm. Nevertheless, with the industry continuing to use New York futures as a cash market for low quality cotton, prices will struggle in this current attempt to push above 55.20 cents.
However, if the drought continues as is, the U.S. crop will get smaller and smaller and the market will challenge 57 cents, then 59 cents, eventually moving into the 60's.
marketing@alchempro.com
