Weekly cotton export sales were particularly good last week and occurred when the market was trading 84.50 to 85.50 cents.
With current low prices, export sales will be booming the next two weeks. However, it is export shipments, not sales, that matter now. Vietnam, China, Pakistan, Bangladesh, and Turkey were the primary buyers. However, shipments, week after week, fail to meet the pace needed to reach USDA’s 12 million bale export estimate. Most all Turkish spinning operations have been impacted by the earthquake as 80% of the Turkish cotton spinning capacity was in the hardest hit region.
Turkey and Pakistan have purchased 3.4 million bales of U.S. cotton. However, only 1.2 million bales have been shipped. Pakistani mills are having great difficulty in opening letters of credit, and that has significantly slowed U.S. exports to that country.
The problems facing Turkey will require at least a year to even somewhat resolve in most cases. Thus, it is difficult to expect U.S. exports to excel 11.8 million bales and could fall as low as 11.6 million.
The January-based National Cotton Council grower survey revealed grower intentions of planting 11.4 million acres. Historically, the survey has been fully accurate. Recall the Decemberbased survey conducted by Cotton Grower magazine suggested plantings of 11.6 million. Thus, the market should have good faith that planting will range between 11.3 and 11.6 million acres.
Demand remains the bearish culprit that is directing market direction. The Pakistani economic problems coupled with the Turkish disaster have taken center stage in the demand picture.