Record and near-record heat expected on the Texas Plains. Remnants of Alberto moved into Alabama and headed into Georgia, Tennessee and the Carolinas. Delayed Georgia crop start likely to result in a significant acreage planted in June. No easing of harsh drought expected through most of the summer in the Southwest.
Cotton futures jumped to 400-point limit gains in overnight trading and stayed there through most of the session into the close Tuesday amid crop concerns coming out of a three-day weekend.
All contracts finished limit up through July 2019, with spot July at 93.21 cents and December at 90.65 cents. July 2019 closed at 89.97 and December 2019 settled up 224 points 81.67 cents.
Record and near-record heat is expected on the Texas Plains through Friday, taking a toll on moisture from recent spotty showers, and flash flood watches were in effect for portions of Alabama, Georgia and Tennessee from Subtropical Depression Alberto.
A delayed crop start in Georgia, the second-largest cotton state, already had indicated a significant portion would be planted in June. Yield potentials typically begin to decline on plantings after the first week to 10 days or so of June, agronomists say.
Volume — restricted by locked limit conditions — totaled an estimated 37,561 lots, down from 51,054 lots the prior session when spreads of 26,744 lots accounted for 52.4%, EFS 50 lots and EFP nine lots. Topping the futures turnover, options volume soared to 50,381 lots (29,979 calls and 20,402 puts) from 26,494 lots (16,409 calls and 10,085 puts).
Spotty showers early in the reporting week brought a tenth of an inch to 3 inches of rain to areas of the West Texas Plains, USDA’s Agricultural Marketing Service reported Friday in a weekly cotton review. That was the first significant rainfall at some cotton sites since October.
Dryland planting took off ahead of federal crop insurance deadlines ranging from May 31 in northern counties to June 5 in the central counties and June 10 in the Lamesa area to the south. Seedling emergence was reported in some irrigated fields.
Mostly spotty showers delivered two-tenths to 3 inches of moisture in eastern and southern Texas, benefitting irrigated and dryland acres in the lower Rio Grande Valley, traditional source of the country’s first new-crop supplies.
The Texas Boll Weevil Foundation estimated that 212,000 acres had been planted in the valley as of May 13. Cotton plantings there last year totaled 189,500 acres. Sources estimated 35% to 45% of the dryland acreage may have been lost. Cotton was in various stages of growth, with some of the more advanced fields producing bolls.
Cotton got a boost with recent rainfall in the Coastal Bend and Upper Coast. Irrigated fields made good progress. The most mature fields were producing blooms. A good, general rain still was needed throughout eastern and southern Texas.
Rainfall in Oklahoma resulted in burn bans being lifted for most of the state, but seven counties remained under restrictions. Planting commenced as most producers had waited for planting rains. Warehouses were busy receiving cotton.
Ginning of the 2017 crop continued in Oklahoma and Kansas. The USDA’s classing facility at Abilene, Tex., continued to grade cotton from Kansas, Oklahoma and Texas.
The harsh drought over the southwestern United States is expected to last through most of the summer, Bryce Anderson, DTN Senior Meteorologist, reported Friday on a drought and forecast update webinar earlier in the week.
National Drought Mitigation Center climatologist Brian Fuchs offered a grim outlook for the region. More than two-thirds of the Southwest already was in some stage of drought, with close to 40% in “extreme” or “exceptional” drought.
Certified stocks grew 3,152 bales to 87,541 on Friday, according to the daily ICE report. Open interest increased 2,888 lots to 87,541, with July’s down 2,930 lots to 115,725 and December’s up 4,494 lots to 144,386.