USDA July numbers.
We’ll have to wait until next month to get USDA’s first farmer survey-based estimates of acres to be harvested and yield.
The numbers released July 11 reflect the actual acreage planted number released back at the end of June, but acres to be harvested and yield, and thus the expected size of the crop, are based on a 3-year average (2010-2012) adjusted for current crop conditions.
Still, expected 2013 production (13.5 million bales) surprisingly was the same as in the June report when running off the March planting intentions numbers.
Actual planted acreage is about 250,000 acres higher than March intentions, but USDA increased acreage abandonment by roughly 500,000 acres and raised expected yield from 800 pounds per acre to 831— resulting in no change in the expected size of the 2013 crop.
USDA’s July numbers were bearish when looking at the overall world supply/demand.
Compared to June projections, an expected larger crop in India led to an increase in expected World production. World usage (demand) was lowered slightly. Adjustments from the 2012 crop year raised 2013 crop year carry-in stocks.
So, all these things combined increased projected 2013-14 crop year ending stocks by almost 2 million bales.
China’s numbers were unchanged from the June report.
The increase in carry-out (ending) stocks was due largely to the larger India crop and somewhat to higher expected U.S.ending stocks.
(Another look at the numbers can be found at USDA projecting 13.5 million bale cotton crop).
Price situation and outlook.
Cotton prices (Dec13 futures) are currently around 84 cents. The move to 84 cents actually broke a nice little recovery back to almost 87 cents since the lows back in late June. Prices peaked at almost 87 cents on Wednesday last week.
Prices are likely to range in the 83 to 87-cent area for the near-term. The August USDA numbers will begin to provide a more definitive picture of the actual U.S. crop as we move forward from there. The U.S. crop situation and outlook will be one factor to shape the price outlook into fall.
I was asked how much of the Georgia crop I thought had already been priced. I think some growers got started when they could lock in 80 cents and stepped up from there. There have been 2 opportunities at Dec13 close to 90 cents. I’m thinking some growers are 50 percent or quite a bit more priced.
Cotton with wet weet.We have had a LOT of rain on Georgia cotton in June and July. There is an excellent article about this and the implications on the UGA Cotton web page at http://www.ugacotton.com.