A Service Provided by Plains Cotton Cooperative Association June 17, 2010 In typically slow, summertime action, cotton futures prices on the Intercontinental Exchange (ICE) moved lower Thursday despite another strong export sales report from USDA.

The department reported net export sales of U.S. cotton totaled 293,500 bales in the week ended June 10, down 53 percent from the previous week and an 11 percent decrease from the four-week average. Featured buyers were China, Turkey, Vietnam, and Taiwan. Net sales of 240,700 bales for delivery in 2010-11 mainly were for China, Turkey, and Indonesia.

“The last time weekly net sales of upland cotton were this large in June was in 2005,” a trader said. “Other than that, it is highly unusual to see such a strong appetite for U.S. cotton this late in the season. With such a small U.S. carryout expected and historically large outstanding sales, there is no margin for error,” he concluded.

Export shipments of 260,400 bales were 15 percent higher than the previous week, but seven percent lower than the four-week average. Primary destinations were China, Mexico, and Turkey.

Due to the scarcity of old- Subscription crop cotton and a lackadaisical interest in trading this week, sales on the spot cotton market also were lower. Growers in Texas, Oklahoma, and Kansas sold only nine bales online in the week ended June 17 compared to the previous week when 110 bales were traded.

News from the field suggests “near perfect” conditions for the U.S. crop and suggest that, with a few exceptions, the crop is off to a running start. However, USDA rated 62 percent of the nation's cotton crop to be in good to excellent condition in the week ended June 13, down from 66 percent the previous week. The new figure was not considered alarming, and all eyes remained on the condition of the Texas crop.

Recent estimates from the Texas Agricultural Extension Service peg the state’s crop at 10 million bales with the predictions backed up by a robust early stand, excellent subsoil moisture, and mild early season growing conditions. If accurate, a 10-millionbale Texas crop could push the total U.S. crop to over 18 million bales.

According to USDA’s weekly crop report, 96 percent of the Texas crop was listed in fair to excellent condition with only four percent rated poor, and no cotton was in very poor condition.

Traders were on alert this week as a storm system in the South Plains of Texas brought hail, rain, and wind gusts as high as 80 miles per hour to the region. However, only limited damage to some cotton was reported from the hail and strong winds, though some plants were lost in areas hit by the heavy storms.

In other areas of the state, scattered showers fell on parts of the Rolling Plains where extremely hot conditions over the past week left moisture levels ranging from short to adequate. Cotton was in fair to good condition, but some of the dryland crop showed signs of stress. After recent rainfall, cotton is improving and starting to bloom throughout the Texas Coastal Bend area. As heat index values reached into the lower 100s for several consecutive days, scattered rains and cloud coverage in South Texas brought little relief from the excessive heat. Soil moisture levels were reported to be adequate but quickly drying as daytime temperatures remained very hot. Any precipitation would be welcomed by growers.