Cotton's Week: August 11, 2006

Cotton's Week: August 11, 2006

®PhytoGen and the PhytoGen Logo are trademarks of PhytoGen Seed Company, LLC. ®™DOW Diamond, Enlist, Enlist Duo and the Enlist logo are trademarks of The Dow Chemical Company (“Dow”) or E.I. du Pont de Nemours and Company (“DuPont”) or affiliated companies of Dow or DuPont. The Enlist weed control system is owned and developed by Dow AgroSciences LLC. Enlist Duo® and Enlist One herbicides are not yet registered for use in all states or counties. Contact your state pesticide regulatory agency to determine if a product is registered for sale or use in your area. Enlist Duo and Enlist One herbicides are the only 2,4-D product authorized for use with Enlist crops. Always read and follow label directions. PhytoGen Seed Company is a joint venture between Mycogen Corporation, an affiliate of Dow AgroSciences LLC, and the J.G. Boswell Company.
USDA Sees Smaller Crop in ‘06

In its August cotton crop report, USDA estimated a ’06-07 US crop of 20.4 million bales. Upland production was estimated at 19.5 million bales and ELS production at 893,000 bales. Harvested area was estimated at 12.8 million acres, implying non-harvested area of 2.5 million acres based on USDA’s June acreage report. The resulting abandonment rate is roughly 16.1% for the ’06-07 crop. The national average yield per harvested acre is estimated to be 765 pounds, 6 pounds above the 5-year average.

On a regional basis, the Southeast crop is estimated at 4.51 million bales, based on harvested acres of 3.24 million and a regional average yield of 670 pounds, 39 pounds below the 5-year average for the region. Most states are expected to see a drop in yields when compared to their respective 5-year averages with the greatest declines in Alabama and Georgia. Alabama’s average yield is down 266 pounds from last year to 430 pounds per harvested acre while Georgia is down 82 pounds to 632 pounds per harvested acre. Virginia leads the region with expected yields of 892 pounds per harvested acre, 99 pounds above their 5-year average.

In the Mid-South, expected production is 8.03 million bales. Harvested area is estimated to be 4.17 million acres and the expected yield is 925 pounds per harvested acre. All states in the region except Mississippi are expected to see yield increases of at least 50 pounds when compared to their 5-year average. Mississippi’s yield is estimated at 840 pounds per harvested acre, 16 pounds lower than their 5-year average.

The Southwest upland crop is an estimated 5.47 million bales. Expected harvested area is 4.51 million acres and the regional average yield is 582 pounds. Expected yields are below the 5-year average in both Oklahoma and Texas; however, yield per harvested acre is estimated to be 581 pounds in Kansas, 65 pounds above the 5-year average. With 2.30 million acres unharvested, abandonment in the Southwest is estimated at 34%.

Upland production in the Westis an estimated 1.53 million bales with harvested area of 576,000 acres and a regional average yield of 1,274 pounds, 51 pounds less than the region’s 5-year average. Both Arizona and New Mexico’sexpected yields are higher than their respective 5-year averages while California’s expected yields are 88 pounds lower at 1,294 pounds per harvested acre.

The ELS crop is an estimated 893,000 bales. Harvested area is pegged at 333,000 acres with an average yield of 1,287 pounds per harvested acre.

U.S. Cotton Crop, 2006-07

 

PLANTED

ACRES

Thou.

HARV.

ACRES

Thou.

YIELD PER

HARV.

ACRE

Lb.

5-YEAR

AVG.

YIELD

Lb.

480-

POUND

BALES

Thou.

UPLAND

 

 

 

 

 

SOUTHEAST

3,355  

3,236 

670  

709 

4,514  

   Alabama

570  

530 

430  

696 

475  

   Florida

105  

104 

531  

599 

115  

   Georgia

1,400  

1,330 

632  

714 

1,750  

   North Carolina

880  

875 

867  

723 

1,580  

   South Carolina

300  

298 

660  

676 

410  

   Virginia

100  

99 

892  

793 

184   

MID-SOUTH

4,205  

4,165 

925  

865 

8,030  

   Arkansas

1,150  

1,140 

1,032  

946 

2,450  

   Louisiana

660  

650 

886  

778 

1,200  

   Mississippi

1,210  

1,200 

840  

856 

2,100  

   Missouri

485  

480 

1,030  

899 

1,030  

   Tennessee

700  

695 

863  

811 

1,250  

SOUTHWEST

6,800  

4,505 

582  

595 

5,465  

   Kansas

100  

95 

581  

516 

115  

   Oklahoma

300  

210 

571  

633 

250  

   Texas

6,400  

4,200 

583  

595 

5,100  

WEST

580  

576 

1,274  

1,325 

1,529  

   Arizona

220  

218 

1,321  

1,295 

600  

   California

310  

308 

1,294  

1,382 

830  

   New Mexico

50  

50 

950  

896 

99  

TOTAL UPLAND

14,940  

12,482 

751  

749 

19,538  

TOTAL ELS

336  

333 

1,287  

1,270 

893  

   Arizona

7.0  

7.0 

891  

933 

13  

   California

290  

288 

1,317  

1,317 

790  

   New Mexico

13.0  

13.0 

886  

954 

24  

   Texas

26.0  

25.0 

1,267  

987 

66  

ALL COTTON

15,276  

12,815 

765  

759 

20,431  

Source: USDA-NASS August Crop Production Report. 



Offtake Estimate Lowered

For the ’06-07 crop year, USDA’s August report projected US production at 20.43 million bales, down 70,000 bales from the July report. Mill use was unchanged at 5.50 million bales while the export projection dropped 400,000 bales to 16.20 million bales. As a result, projected total offtake was lowered 400,000 bales to 21.70 million bales. Ending stocks for ’06-07 are projected at 4.70 million bales, for an ending stocks-to-use ratio of 21.7%.

USDA gauged US ’05-06 cotton production at 23.89 million bales. Estimated mill use was unchanged from the July report while the export estimate was increased 550,000 bales to 17.55 million. As a result, projected total offtake increased 550,000 bales to 23.50 million bales. This generates an ending stocks value of 5.90 million bales. The estimated stocks-to-use ratio is 25.1%.

The August report sees ’06-07 marketing year world production of 115.59 million bales, up 1.23 million bales from the July report. World mill use was lowered 60,000 bales from the July report to a projected 121.69 million bales. Consequently, world ending stocks for ’06-07 are projected to be 48.29 million bales for a stocks-to-use ratio of 39.7%.

The ’05-06 world production estimate was raised 170,000 bales from the July report to 114.29 million. Beginning stocks were unchanged from the previous month at 53.98 million. Estimated world mill use was lowered 50,000 bales to 116.71 million. The projected world ending stocks on July 31, ’06 is now pegged at 52.49 million bales. This has a corresponding stocks-to-use ratio of 45.0%.



Texas Counties Tagged Disaster Areas

USDA designated counties in Texas as primary natural disaster areas, making all qualified farm operators in the designated areas eligible for low-interest emergency (EM) loans from USDA’s Farm Service Agency (FSA).

Lubbock county was designated a primary disaster area due to losses caused by drought, high winds and extreme temperatures that occurred from Jan. 1, ’06, and continuing. Also eligible because they are contiguous are Crosby, Floyd, Garza, Hale, Hockley, Lamb, Lynn and Terry counties. All of these counties were designated natural disaster areas on Aug. 8, ’06, making all qualified farm operators in the designated areas eligible for EM loans, provided eligibility requirements are met.

Farmers in eligible counties have eight months from the date of the declaration to apply for loans to help cover part of their actual losses. FSA will consider each loan application on its own merits, taking into account the extent of losses, security available and repayment ability. FSA has a variety of programs, in addition to the emergency loan program, to help eligible farmers recover from adversity.

USDA also has made other programs available to assist farmers and ranchers, including the Emergency Conservation Program, Federal Crop Insurance and the Noninsured Crop Disaster Assistance Program. Interested farmers may contact their local USDA Service Centers for further information on eligibility requirements and application procedures for these and other programs. Additional information also is available online at: http://disaster.fsa.usda.gov.



Penn Resigns USDA Post

Agriculture Secretary Mike Johanns accepted the resignation of Dr. J.B. Penn, Under Secretary of Agriculture for Farm and Foreign Agricultural Services, who resigned effective at the end of August to return to the private sector.

Since May ’01, Penn has overseen the activities of the Farm Service Agency, Foreign Agricultural Service and Risk Management Agency, as well as USDA’s extensive participation in international activities, including the WTO Doha Round negotiations and other trade agreements.

"J.B. Penn's experience and leadership, from his diligent actions to assure timely implementation of the 2002 Farm Bill's provisions that assist domestic producers to his steadfast efforts to reduce trade barriers and increase our agricultural exports, have worked to improve the economic outlook for America's farmers and ranchers,” Johanns said. “His vision for international trade and development on behalf of our producers and agribusinesses is recognized around the world, and I have valued his counsel and determination through the many months of tough negotiations on the Doha Development Agenda."


BWCC Steering Group to Meet

The Beltwide Cotton Conferences Steering Committee, which is scheduled to meet by conference call on Aug. 17, will discuss key production and policy topics for consideration at the ’07 conferences at the New Orleans' Marriott and Sheraton hotels on Jan. 9-12.

Led by Chairman Bill Lovelady, the panel also will discuss the results of the ’06 Beltwide Post-Conference Survey to assist in planning for the '07 forum.

The group also will discuss future meetings: the ’08 BWCC at the Gaylord Opryland Hotel in Nashville, TN, on Jan. 8-11; the ’09 BWCC at the Marriott Rivercenter/Riverwalk, San Antonio, TX, on Jan. 5-8; and the ’10 BWCC's return to the New Orleans’ Marriott and Sheraton hotels on Jan. 4-7.

Meanwhile, the New Orleans Metropolitan Convention and Visitors Bureau issued an updated "State of the City" report. Located at http://www.neworleanscvb.com/articles/index.cfm/action/view/articleID/570/typeID/1, the report includes information regarding hospitality, transportation, health and safety as the city continues to welcome meeting and convention delegates and leisure travelers to New Orleans.



Western Growers to See SE Production

Cotton producers from the Far West will travel to the Southeast region, visiting operations in North Carolina and South Carolina on Aug. 13-18 as part of the '06 Cotton Foundation Producer Information Exchange (P.I.E.) Program's fourth and final '06 tour.

The Far West visitors include:  Arizona producers Claude Brown and Paul Ollerton, both of Casa Grande; Troy Clonts, Safford; and Marcus Martin, Coolidge; and California producers Michael Cauzza, Buttonwillow; William Haupt, Kerman; Charlie Meyer, Stratford; Rodney Montgomery, Riverdale; and Juvenal Rosa of Laton.

The group will begin their tour in North Carolina with visits to: Denning Farm in Dunn, David Dunlow’s operation and other local farms in Gaston, and Josey Farms in Scotland Neck. While in South Carolina on Aug. 16, the group will tour Nucor Steel and then visit Gil Roger’s Farm in Hartsville. The following day, the participants will visit BayerResearchCenter in Sellers before returning to North Carolina for tours of Cotton Incorporated’s headquarters in Cary and the Ramtex Denim Mill in Greensboro.

The P.I.E. is supported by a grant from Bayer CropScience to the Foundation.



’05 Exports Reach 17.5 Million Bales

Crop year ’05 exports reached 17.5 million bales (480-lb).

Outstanding sales of about 972,800 bales on July 31 were carried forward. Net export sales for the week ending Aug. 3, ’06 of 34,400 bales combined with ’06-07 sales of 932,800 made in the previous marketing year brings total '06-07 sales to slightly more than 1.9 million. Total sales at the same point in the '05-06 marketing year were almost 4.3 million bales.

Total new crop ('07-08) sales are 59,700 bales. Shipments for the week were 158,400 bales, bringing total exports to date to 158,400 bales, compared with the 147,500 bales at the comparable point in the '05-06 marketing year.



Prices Effective Aug. 11-17, 2006

Adjusted World Price, SLM 11/16

45.36 cents

*

Coarse Count Adjustment

0.00 cents

Marketing Loan Gain Value

6.64 cents

Import Quotas Open

 0

Step 3 Quotas (480-lb. bales)

 0

ELS Payment Rate

0.00 cents

*No Adjustment Made Under Step I
 
Five-Day Average
 
Current 3135 c.i.f. Northern Europe

61.32 cents

Forward 3135 c.i.f. Northern Europe

 NA

Coarse Count c.i.f. Northern Europe

NA

Current US c.i.f. Northern Europe

65.90 cents

Forward US c.i.f. Northern Europe

NA

 
2005-06 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-June)

47.76 cents

**

**August-July average price used in determination of counter-cyclical payment

Sponsored by
Dow AgroSciences