Not brilliant, but not disastrous either.
That appeared the immediate market verdict on US cotton export data for the week to last Thursday.
New York cotton futures, having stood 0.5% higher at 77.38 cents a pound before the data were released, fell to 76.92 cents a pound in the aftermath, a drop of 0.1% on the day.
The US sold 364,800 running bales of upland cotton during the week, 9% down week on week, but well ahead of the pace needed to meet the forecast of 13.45m running bales for the whole of 2017-18, ending in July. (A forecast which was downgraded last week by the USDA, which also sees 630,000 unning bales of pima cotton exports this season.)
However, actual upland cotton exports tumbled 25% week on week to 324,700 running bales.
And it is this figure which is more crucial, given that the pace has been lagging the pace required for the full season, and was, narrowly behind it this time too (if only by roughly 20,000 running bales).
The shortfall in actual shipments, behind bumper orders, is being blamed by many commentators on a trucking squeeze, enhanced by new US regulations on driver movements.
As Ron Lee at McCleskey Cotton said earlier: “Drivers can no longer ‘cheat on their hours of service. That means there are fewer hours available to ship goods.
That means there is a shortage of trucks to ship stuff. That means freight rates have to go up to meet demand.
“Instead of getting a load of cotton from Bronwood to Savannah for $450 like shippers have paid for years, it’s now more like $800 if you want to get it picked up and delivered.
“It’s no small issue as this increased shipping cost will essentially add about a penny per pound to the cost of the cotton in that trailer.”
Japan’s growing appetite for US corn
Among the main grains, US corn sales enjoyed a big week, at 1.97m tonnes – the second highest in the past 16 months, (the biggest being a 2.36m-tonne week unveiled in early November.)
The figure was also well above market expectations of US export sales of at best 1.50m tonnes.
Buying was particularly strong from Japan, at 453,300 tonnes, as it has been for much of the season, as well as Mexico, at 258,600 tonnes, which has kept up a more typical pace of demand.
Total commitments (ie combined exports and unfulfilled sales) of US corn to Japan, at 7.30m tonnes, are up 23% year on year.
White wheat let-down
Wheat export sales, at 311,100 tonnes, were down 21% week on week, but within the range of market forecasts of 200,000-450,000 tonnes, which were issued amid some worries over the impact of higher prices in deterring buyers.
In fact, the lower figure reflected another downturn in sales of white wheat, which have proved volatile of late, coming in at 23,369 tonnes this time, down 83% week on week.
Export sales of hard red winter wheat (traded in futures markets as Kansas City wheat), at 131,194 tonnes, were not fantastic, but at least up nearly 10,000 tonnes week on week, while those of soft red winter wheat, as traded in Chicago, set a 2018 high of 46,994 tonnes.
(Minneapolis-traded) hard red spring wheat achieved export sales of 109,566 tonnes, the best result in two months.
US export sales of soybeans in the latest week, at 640,400 tonnes, dropped 4% week on week, but came in within the range of market estimates of 450,000-750,000.
On a more upbeat note, the USDA also announced sales of 197,120 tonnes for 2018-19 (starting in September).
Actual exports in the latest week reached 1.38m tonnes, down some 80,000 tonnes week on week, but remaining above 1m tonnes for a 19th successive week.
Again, China, at 717,600 tonnes, was the top destination, easing concerns over curbs on imports of US soybeans.