From the Desk of – Todd Parker – Penny-Newman Grain
Cottonseed prices are unchanged to start the week. Origin values have traded sideways for the second week. Texas is at $260 old and $250 new, The Delta States are at $225 old and $215 new, and the Eastern States are trading at $185 old and $180 new. California is still trading at a minimum of a $15 discount to all these values relative to the freight spreads. At some point replacement will need to kick in and the $15+ discount will go away by either the origin moving lower or CA moving higher or a little of both. For new crop, the spread has to converge before any trade takes place unless the buyer or seller is simply speculating the trade and beginning with a $15+ negative margin.
Tomorrow we will see the USDA plantings report which will give us an idea of what got planted. Then we can shift the conversation to what will be abandoned which there is already talk about how many Texas acres were “dusted in” to collect the insurance. Last year Texas cotton farmers abandon 1.8 million acres which ended up being 25.5% of the acres planted.
I see prices continuing firm for old crop as supplies are tight and we have four months until new crop rail will hit CA. Dairy demand remains good as it should with current milk prices