PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 11:56 UK, 15th Jul 2014, by Agrimoney.com
Cotton bucks trend of strong US crop ratings

Cotton missed out on the improvement seen in other US crops amid cold and wet weather in Arkansas, and "intense insect and weed pressure" in parts of Texas, the top producing state.

The condition of most US crops held steady or improved in the week to Sunday, with the proportion of corn rated "good" or "excellent" rising by 1 point to 76%.

That vies with the rating seen in 1999 for the title of the highest-rated corn crop for mid-July, and reflecting in particular a four-point improvement to 62% in the proportion of wheat seen as good or excellent in Kansas, where rains are assuaging a long-standing drought.

"Widespread rain was prevalent in northern and south central Kansas, with rainfall totals ranging from a 0.5-2.5 inches," USDA scouts said.

At Benson Quinn Commodities, Brian Henry said: "On a state by state basis, there just isn't much to be concerned about."

'Needed more heat units'

The proportion of soybeans rated good or excellent held at 72% for a fourth week, the best mid-July rating in at least 20 years.

Again, the Kansas crop improved, as did that in Louisiana, where regular showers have brought good growing conditions, offsetting small declines in ratings of crops in northern states, such as North and South Dakota and Wisconsin, where temperatures are proving a little cool.

In North Dakota, "row crops needed more heat units to advance crop development", USDA scouts said.

However, "reports indicated the cooler weather has been beneficial to small grains, canola, and flaxseed", they added.

The condition of US spring wheat, grown in the northern states, remained at 70%.

'Intense insect and weed pressure'

However, while the condition of other crops, such as oats, rice and sorghum, held steady too, that of cotton fell by 2 points to 53%, a rating around average levels.

Although the Kansas and Louisiana cotton crops improved too, the rating for Arkansas fell by 6 points to 64%, after a week of below-normal temperatures and above-average rainfall.

In Texas, which like Kansas has also seen drought retreat, the proportion of cotton rated good or excellent dropped by 2 points to 39% as "hot and dry conditions persisted throughout majority of the state".

In parts of the state's southern high plains region, "some producers reported intense insect and weed pressure", USDA scouts said, adding that crops were also feeling a hangover in terms of delayed development from "intense" thunderstorms in May.

'Selling opportunity'

The data follow a USDA upgrade on Friday to its estimates for the domestic cotton crop, with the harvest forecast raised by 1.5m bales to 16.5m bales.

The estimate for inventories was raised by 0.9m bales to a six-year high of 5.2m bales, a prospect which on Friday sent New York's benchmark December contract to a contract low of 67.10 cents a pound.

The contract at 07:00 local time (12:00 UK time) on Tuesday stood at 68.30 cents a pound, unchanged on the day, amid some doubts over the sustainability of a rally despite the deterioration I crop condition.

"Any bounce here should be viewed as a selling opportunity," Sterling Smith at Citigroup said.

'Putting pressure on prices'

Commerzbank highlighted separate data from China showing a 19.1% drop to 218,600 tonnes in the country's imports, the world's biggest, last month, compared with June 2013.

"The dwindling demand from China is also putting pressure on cotton prices," the bank said.

However, it added that the monthly figure "although a significant decline, is actually more moderate than had been widely expected", representing a 13.9% rise from May.

China's cotton imports are being undermined by reforms to a subsidy regime which has landed the country with 60% of world inventories of the fibre.

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