Interviews
Plexus cotton market report
24 Oct '06
3 min read
Last week we saw the USDA publish its October supply and demand report which came out with another reduction of the Pima crop by 21,000 bales. This has meant a drop of 90,000 bales in just two reports.
The crop is now estimated at 804,000 bales. The reduction comes by dropping the California yield from 1270 lbs to 1244 lbs and by dropping the New Mexico yield from 997 lbs to 775 lbs. This is more in line with private estimates.
However, the Texas yield is still thought to be too high and we are still slightly over some private estimates of the Californian yield also.
If you apply 1200 lbs to California and 800 lbs toTexas (some believe the Texas yield to be 750 lbs) and leave acreage and yields in Arizona and New Mexico unchanged, we could expect a crop of 768,000 bales.
Despite the above, we can work on a number of 800,000 bales as already being priced into the market. At least with last weeks report we feel like we are getting much closer to reality.
The weather concerns over the past couple of weeks had already started to firm up the offering levels from a couple of shippers and last weeks report should help to stabilize the price levels generally.
In Egypt, most estimates of the crop are now in the 220 - 230,000 mt range which is about 20 - 30,000 mt more than last season. The Giza 70 crop is thought to be substantially lower than the numbers being reported (possibly only 12,000 mt - or even less), the Giza 88 crop is thought to be about unchanged at 25,000 mt.
The crop is now estimated at 804,000 bales. The reduction comes by dropping the California yield from 1270 lbs to 1244 lbs and by dropping the New Mexico yield from 997 lbs to 775 lbs. This is more in line with private estimates.
However, the Texas yield is still thought to be too high and we are still slightly over some private estimates of the Californian yield also.
If you apply 1200 lbs to California and 800 lbs toTexas (some believe the Texas yield to be 750 lbs) and leave acreage and yields in Arizona and New Mexico unchanged, we could expect a crop of 768,000 bales.
Despite the above, we can work on a number of 800,000 bales as already being priced into the market. At least with last weeks report we feel like we are getting much closer to reality.
The weather concerns over the past couple of weeks had already started to firm up the offering levels from a couple of shippers and last weeks report should help to stabilize the price levels generally.
In Egypt, most estimates of the crop are now in the 220 - 230,000 mt range which is about 20 - 30,000 mt more than last season. The Giza 70 crop is thought to be substantially lower than the numbers being reported (possibly only 12,000 mt - or even less), the Giza 88 crop is thought to be about unchanged at 25,000 mt.
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