Ideas of more benign weather for the US cotton belt eased
investor nerves, after a week when the crop faced setbacks ranging from "serious
damage" from dryness to a battering from Tropical Storm Cindy.
The US Department of Agriculture rated at 57%, the
proportion of domestic cotton rated "good" or "excellent" as of Sunday, a drop
of 4 points week on week.
While still an above-average reading, with the mean at about
52-53% for the time of year, the figure underlined the extent of the
deterioration in a cotton crop which had two weeks ago rated as 66% good or
excellent – easily the highest figure for mid-June on data going back to 1995.
However, the unusually rapid deterioration reflects a series
of setbacks from weather extremes.
It also tallies with persistent market
talk that the US crop was not in as good health as official data
had suggested, although expectations remain of a strong harvest this year - as reflected in a drop in futures prices this month.
'Rain and wind damage'
In the latest week, the good or excellent rating on the Louisiana
crop dropped by 6 points to 61% as the state battled with the landfall of
Tropical Storm Cindy, with one USDA scout reporting that the tempest "brought
rain and wind damage".
The state received an average of 3.6 inches of rain last
week, while the number of days suitable for fieldwork was limited to 2.1.
By contrast, the crop in Oklahoma deteriorated by 19 points
to 76% good or excellent amid some return of dryness, with the USDA noting that
in the state "topsoil and subsoil moisture conditions were rated mostly
adequate to short".
In Texas, the top cotton-growing state, the reading fell by
4 points to 46%, well below the 52% figure a year ago, sapped by a range of
setbacks ranging from dryness to pests.
"High winds and blowing sand were taking a toll on cotton
seedlings in the Northern High Plains," USDA scouts said.
"Lack of moisture in areas of the Northern Low Plains was
affecting cotton emergence and causing serious damage to emerged plants.
"Some cotton fields in the Upper Coast were having worm
Nonetheless, cotton futures for December staged only a
modest recovery, adding 0.5% to 67.59 cents a pound in early deals in New York,
amid ideas of better weather, including drier conditions for Louisiana, and
with Texas having seen rain some relief.
"There looks to be a lot of rain over the West Texas region
with some areas getting 1-2 inches," said Ecom.
"It looks like most of the US growing areas is getting a
nice amount of rain which should help the growers with their crops moving
forward," the trading house said, if adding that "there have been reports of
big storms and hail.
"However, it is too early to know if there has been any
significant crop damage."
At Commonwealth Bank of Australia, Tobin Gorey said that the
US cotton crop condition "is still broadly in good shape", despite its recent
Sowings data ahead
The data come amid some debate too over the prospect on
Friday of much-anticipated USDA statistics on US sowings of crops including cotton,
for which seedings are currently estimated by officials at 12.2m acres.
At Rose Commodity
Group, Louis Rose said that "although we still have some fine-tuning to do on
our planted acreage estimate, we think that the USDA will estimate planted area
at around 12m acres.
"However, despite weekend rains, the current official 10%
abandonment rate across Texas will likely have to be revisited."
The USDA is currently estimated overall US harvested area of
cotton at 11.38m acres, implying an abandonment of 7.0%.