With pomp, ceremony and politicians, a 25-member delegation of the China Chamber of Commerce for Import and Export of Textiles stood at the Texas State Capitol in Austin May 11 and announced they would buy $400 million worth of West Texas cotton.
That was Friday. On Monday, May 14, the cotton market didn't shoot up in response. But the market could be watching the weather more this week, and may already have accounted for the export scenario. Nevertheless, the Chinese purchase was big.
"If you do round math, it is about 1.6 million bales," says Shawn Wade of Plains Cotton Growers, Inc., (PCG) Lubbock.
Roger Haldenby, PCG vice president of operations, who was in Austin at the Capitol as Wang Shenyang, head of the Chinese delegation, made the announcement, said it was a significant cotton purchase.
"They came to order 350,000 metric "tons" of cotton (or 1.6 million bales) to be actually ordered at the conclusion of their trip," Haldenby noted, back in his Lubbock office on Monday.
Since the Chinese could buy cotton elsewhere in the United States, it might seem a presumption to say the purchase is all West Texas cotton.
"But they need Texas cotton in order to get the sizeable amount they want," Haldenby explains.
And the Chinese buy is good for all the U.S. Cotton Belt and industry, he adds.
"It reinforces the (trade) relationship between the United States and China," Haldenby assures. "And it shows the U.S. produces quality cotton the Chinese demand. It (cotton textile items from China) then shows up in U.S. stores. So then the circle is completed worldwide."
Wade says the Chinese commitment reportedly is for 2006-crop cotton on hand.
The High Plains - the "World's Biggest Cotton Patch" - typically will plant roughly 4 million acres of cotton, starting about May 10. With Monday being May 14, this is the optimum week to roll the cotton planters. Right now, cool temperatures are more of a problem than the many weeks of rain have been.
The cotton market surely wants to see how much cotton actually gets planted.
"One farmer in Parmer County got two inches of rain last week on no-till ground, and he is planting cotton this week," Wade reported. "Overall, the cotton planters are running - north to south - across the High Plains this week."
But the daily temperatures - and predictions for all this week - are what are scary as growers attempt to get a good stand of cotton.
Last year - same week - the temperature reached 100 degrees at Lubbock. But going into the 2007-planting season, temperature highs were in the 60s and nighttime lows in the 40s.
"That's sure not good for cotton," Wade says.
What's more, the temperatures in the Lubbock region actually are supposed to get cooler - not warmer - as this targeted optimum week to plant cotton progresses.
By Thursday and Friday, the highs are only expected in the 60s and lows in the 40s, and a warm-up isn't forecast until Saturday, May 19.
Today's cottonseed is mighty expensive. And those temperatures are just not nearly as warm as producers want for good plant emergence, Wade observes.
How much Plains cotton ground is planted to corn or sorghum because of the growing ethanol market and corn prices is another factor the market is watching.
So as wonderful as the Chinese announcement was in Austin on Friday, the cotton market will be watching the High Plains of Texas closely this week - and beyond - to see how much cotton actually gets planted, and in what condition.