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US cotton deteriorates sharply again, but corn, soy improve


The US cotton crop has deteriorated sharply again, even as corn and soybeans improved, highlighting a growing divide in growing conditons between the Corn Belt and the dry southern Plains.


The US Department of Agriculture said that the proportion of domestic cotton rated “good” or “excellent” as of Sunday had fallen by six points week on week, to 43%.


The reduction took to 13 points the decline in two weeks - making it the worst fortnight for the US cotton rating since a 15-point slump recorded in September 1995, when the crop was heading for a 24% drop in yield to a 12-year low.


The latest downgrade meant a crop that a month ago tied with 2005 to rank as the second best on data going back to 1995 – with 2010 the best rated – to one that is now seen as well-below average, with the five-year mean reading at 51% good or excellent for this time of year.


‘Drought severity index on the rise’

As in the previous week, the condition decline reflected in the main deterioration in Texas, which is typically responsible for half of US production, and in the neighbouring state of Oklahoma, where drought has spread significantly over the past month.


The proportion of Oklahoma rated in drought last week by the USDA, at 24%, was up from zero four weeks before, and was the highest in nearly a year.


For Texas, the proportion rated in drought, at 32.0%, was up from 2.0% four weeks before, and was also the highest since early September 2018.


“Colour expanded over the drought map for the southern Plains,” said Dr Mark Welch at Texas A&M University.


“The drought severity index is on the rise, opposite of the movement we saw in this index last year.”


‘Drought continued to expand’

In Oklahoma, USDA scouts rated 38% of cotton as good or excellent, down 8 points week on week.


In Texas, the reading came in at 34%, also down 8 points for the week, and by 18 points over the latest fortnight.


While some parts of Texas had received rains of 5 inches, overall, “drought continued to expand and/or intensify throughout the state,” USDA scouts said.


“Recent rainfall improved cotton conditions in the Plains. However, dryland cotton continued to lag behind expected progress.”


‘Not as good’

At Rose Commodity Group, Louis Rose said that the data “seem to now be reflecting what many, including us, have suspected for some time – the US crop is not as good as the USDA estimated” in its latest crop forecasts.


The USDA in its latest Wasde briefing, two weeks ago, pegged the US cotton harvest at 22.52m bales, a figure which if realised would be up more than 4.1m bales year on year, at the highest since 2005.


Mr Rose said that some parts of West Texas had received “some relief from hot and dry conditions”, but added that “the largest portion of dryland acreage south of Lubbock continues to suffer.


“We believe the US crop is likely to get smaller than the USDA’s current 22.5m-bale projection, but the US will still likely produce a significantly larger crop than it did in 2018.”


Corn, soy improvement

By contrast, the US corn and soybean crops, for which production is centred further north, showed some improvement in the latest week, by 1 point to 57% good or excellent and by 2 points to 55% respectively.


In both cases, crops in the major Midwest growing state of Illinois showed hefty improvement, by 7 points for corn and 10 points for soybeans, with Iowa reading above 60% for both crops, with dryness remaining limited in the region.


The USDA last week showed 2.5% of the Midwest in drought.


Still, the corn and soybean readings remain below average levels, a reflection of their poor start, after persistent rains slowed sowings to historically slow levels, and prevented many seedings, with both crops at their worst condition for the time of year since the drought year of 2012.


‘A lot of acres yet to produce’

Corn and soybean crops are also notably behind on development, a factor which has put increased emphasis on weather ahead, and in particular the data of first frosts, as gauges of final yield numbers.


For soybeans, for which the USDA showed 79% of crop pod-setting, 12 points behind the average pace, Benson Quinn Commodities said that this “means 16.1m acres are still to set pods or put another way, that’s a fifth of the soybean crop that hasn’t set a pod yet.


“For a crop that is dependent on daylight to mature, there are still a lot of acres yet to produce a crop.”


For corn, the proportion of crop reaching the late, “dented” stage of development, at 27%, is 19 points behind the average.

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