Just when cotton growers thought it was safe to return to
the fields, along comes another hurricane threat.
With much of Texas and the Mississippi Delta region still recovering
from the inundations brought by Hurricane Harvey, and its remnants, another storm,
in the form of Hurricane Irma, is bleeping on the radar for parts of the US
The reaction in New York was to send cotton futures up the
'Strength of the
storm looks impressive'
"Hurricane Irma remains the big weather story of the week,"
said broker Allendale.
"The track that the storm will take remains to be seen, but
the strength of the storm looks impressive," with Irma now rated a category 5
"Hurricane Irma is currently forecast to affect the South East
next week," said weather service MDA.
"But the situation will need to be monitored for any
westward adjustment," which might take it into more significant areas for growing
cotton and other crops.
'Cotton fields could
be in danger'
Benson Quinn Commodities, saying that "Irma will be watched
closely", noted that "current predictions indicate that the system may be
tracking further to the west than previously thought.
"Some current forecasts indicate it will likely impact south
Florida before making landfall again in Alabama."
At Rose Commodity Group, Louis said that Irma was "currently
forecast to come ashore central eastern Florida as a hurricane over the coming
weekend or early next week.
"If such occurs, cotton fields across the South Eastern
states could be in danger," although he too added that the "path of this storm
remains far from certain".
Cotton futures for December closed 3.0 cents higher, the
maximum daily move allowed by the exchange, at 74.88 cents a pound, a jump
equivalent to 4.2%
That represented the contract's highest close in nearly four
months, and took to 12% its bounce from a mid-August low.
Many other ags achieved gains too, although less impressive
October raw sugar
futures settled up 2.0% at 14.03 cents a pound in New York, retaking the psychologically
important 14.00 cents-a-pound mark, on renewed talk that India will soon allow
imports of 300,000 tonnes of raw sugar on the country's southern ports.
This represents the latest twist in a long-running, on-off
saga of import needs, with the latest rumours coming after Food Minister Ram
Vilas Paswan in a Twitter post on Monday said that India would soon decide on
'May stress soybeans'
And in Chicago, soybeans
outperformed, adding 2.0% to $9.68 ½ a bushel for the November contract, which closed
back above its 100-day moving average.
If Irma is the biggest market weather worry, at least in the
US, it is not the only one, with cool and dry weather a concern too in
particular for soybeans, which are later developing than some other
autumn-harvested crops, such as corn.
"Dry weather is expected across the Plains and the central
and western Midwest for most of the next 10 days," said MDA.
"The dry weather will favour maturation of the corn crop,
but may stress soybean filling, especially in Iowa and Illinois, preventing
soybean yields from reaching their full potential."
Darrell Holaday at Country Futures flagged "fundamental
support" for soybean prices "from concern about prolonged dryness in the Midwest
late in the growing season and the concern that it has trimmed soybean yields".
Indeed, the dry outlook comes after a "large portion of the
Corn Belt has seen drier conditions than normal over the course of the last
couple of weeks", Benson Quinn Commodities noted.
"You get the
impression that a large portion of the crop isn't getting much of an
opportunity at the potential extra bushels."
And there was some support from demand factors too, with weekly
US data showing exports of 644,909 tonnes, in line with market expectations,
and an additional sale of 136,000 tonnes to China on top.
"The bulls remain hitched" to hopes for Chinese demand for soybeans
in the last three months of 2017, and that "the US should be competitive with
Brazil on prices", said CHS Hedging.
Export upgrade ahead?
Corn futures for
December added 0.6% to $3.58 ½ a bushel, again with some help from US export
US corn exports last week (the last of 2016-17), at 797,555
tonnes, were well ahead of forecasts of at best 600,000 tonnes.
Indeed, a marketing year total of 2.24bn bushels from this
source was "15m bushels larger than the US Department of Agriculture estimate
of 2.225bn bushels" for 2016-17, Country Futures' Mr Holaday said.
"This would argue for a 15m-bushel increase in the next
Wasde" crop report from the USDA, next week, in terms of the estimate for US
corn exports last season.
'USDA is overstating
CHS Hedging noted that "farmer selling dried up on the price
break" which took corn futures to contract lows earlier last week.
"For the second year in a row, many feel the 'lows' were
etched in stone the final week of August."
And there remain ideas that the USDA is too generous in its
forecast for the domestic corn yield.
"Early yield reports confirm big crops in the Delta, while
limited Midwest returns suggest the USDA is overstating corn yields," said
Richard Feltes at RJ O'Brien.
kept pace in Chicago, adding 0.6% to $4.43 a bushel for December delivery, with
the contract earlier touching its 20-day moving average for the first time
USDA data for US wheat exports last week were poor, at 252,465
But that was for a week in which southern US shipments were
hampered by Hurricane Harvey, with Gulf ports particularly important for wheat.
"There were no wheat inspections out of Texas for the week
ending August 31," Futures International's Terry Reilly noted.
Also on bulls' side was the growing worries over dryness in
Australia, as highlighted earlier by Agrimoney.com.