Markets slightly improve asking price for US growths
02 Sep '06
3 min read
Yet, after considering that USDA pegged the U.S. crop at 20.4 million bales in both July and August, anything can happen. Should the Chinese crop reach anywhere near 28.9 million bales then New York will surly not be able to climb above the 60 cent level.
The slow pace of U.S. exports continues to draw a jaundice eye from many observers. With commitments only about fifty percent of the year ago level, there are rumblings of disaster in the works. Some have even ventured to lay the blame at the demise of the Step 2 program. Yet, remember many sales were "front end loaded" at the end of the 2005-06 marketing year to take advantage of Step 2 payments.
Too, remember that the only available empirical evidence clearly demonstrated that Step 2 provided only a negligible boost to U.S. cotton exports.
It is far too early to be concerned about the level of U.S. exports. China will be the world's leading importer. Once there import quotas are opened, hopefully later this month, U.S. exports will climb.
As stated last week, the market is in the midst of the dog days of summer. We will let that dog lie for another month, but the USDA report in a little over a week may stir him a bit.
marketing@alchempro.com
