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US cotton rating tumbles, as dryness fears blip on market radar

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The US cotton crop deteriorated at one of its fastest paces on record last week, hit by dryness in the southern Plains which is raising mounting concerns for prospects for some other crops too.

 

The US Department of Agriculture pegged at 54% its estimate for the proportion of the US cotton crop in “good” or “excellent” condition as of Sunday – a drop of 7 points week on week.

 

The downgrade - which matched the largest week on week decline since an 8-point tumble in June 1997 - reduced a crop which had been the best rated since 2010 to one only marginally above the average reading for the time of year of 52%, on Agrimoney calculations.

 

And it reflected in particular cuts to readings for Texas, the top US cotton-growing state, and Oklahoma, in both of which dryness, while still limited, is reviving as an investor concern.

 

’Drought conditions intensified’

 

In Texas the proportion of crop rated good or excellent tumbled by 13 points to 46% in a week that was “mostly hot and dry across the state”.

 

USDA scouts in the state said “drought conditions intensified in South Texas, the High and Low Plains, and the Edwards Plateau”, although noting some cotton improvement in the High Plains.

 

The proportion of Texas topsoil rated “short” or “very short” of moisture rose by 13 points to 73%.

 

In Oklahoma, where the proportion of topsoil viewed as short or very short of moisture rose by 12 points to 55%, the proportion of the state’s cotton rated good or excellent matched that of Texas in declining by 13 points, although to 60%.

 

‘Hot and dry’

The drop comes amid rising comment among investors over a drop-off in rainfall in the southern Plains, with Louis Rose at Rose Commodity Group noting that “concerns regarding dryness across west Texas, Oklahoma and Kansas are increasing.

 

“The forecast remains hot and dry” for these states.

 

At Halo Commodity Company, Tregg Cronin also said that “dryness is becoming more of an issue across Kansas, Oklahoma and Texas with a large swathe running 25-50% of normal over the last month”, in terms of rainfall levels.

 

“The dryness certainly has implications for fall crops, but more importantly, the dryness will need to be monitored heading into September and hard red winter wheat sowing,” Mr Cronin added.

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