One question left open by the cotton rally in the last session, on fears of a late-week frost in Texas, is how much crop in the state might be vulnerable to cold.

The answer came overnight, with a US Department of Agriculture figure, in its weekly Crop Progress report, that 80% of the crop had open bolls, up 7 points week on week – or more importantly, that 20% of bolls remained closed.

'Of major concern'

"Texas," the top US cotton-growing state, "is of major concern as according to the recent crop condition report around 20% of bolls haven't opened yet," said traders at Ecom.

"If we see crop freezes then this could impact production as these bolls may lock shut and the unopened bolls will be lost."

At Commonwealth Bank of Australia, Tobin Gorey, also noting the 20% unopened boll figure, said that a frost would "result in significant loss of yields.

He added: "The forecast still needs to be realised of course.  Weather forecasters, though, are confident enough to place it in their forecasts so the event is likely to occur."

'Chatter of strong Chinese demand'

Ron Lee at Georgia-based McCleskey Cotton was a little less downbeat, saying that Texas growers "have been very aggressive in their defoliation since the last freeze scare, and I'd guess that open bolls number will probably be closer to 90% by this weekend when the cold snap arrives.

"Don't get me wrong. If temperatures drop into the high 20s and low 30s Fahrenheit for an extended time, those unopened green bolls are all but done."

Still, he also flagged that US frost was not the only reason to get bullish on cotton, flagging "some chatter of strong Chinese demand" for the fibre.

In fact, China imported 92,847 tonnes of cotton last month, up 53% year on year, customs data showed.

'Hamstrings our main export competitor'

Furthermore, he noted talk that India, the second-ranked cotton exporter, had raised the minimum support price for cotton growers, with an extra bonus of 100 rupees per 20 kilogrammes for producers in Gujarat, the country's largest cotton-growing state.

"This will be a boon to growers there but also should keep US exports on an aggressive estimate as this effectively hamstrings our number one export competitor," Mr Lee said.

Certainly, while New York cotton futures eased back after the 4% gains of the last session, it was not by much, with the December lot at 69.64 cents a pound, down 0.1%, as of 09:50 UK time (03:40 Chicago time).

'Ideal weather for harvesting ended'

Nor did grains, which also enjoyed strong gains in the last session, retreat much, with December corn, for instance, down 0.1% at $3.51 a bushel in Chicago.

The USDA crop progress data helped in showing that US farmers had harvested just 10% of their corn crop in the week to Sunday, leaving progress at 38% complete, well below the 59% typically harvested by now.

It was also behind the 44% figure that investors had expected, and this when wet weather this week is expected to slow fieldwork still.

"Ideal weather for US harvesting ended when rain increased across the central US on Saturday," said Terry Reilly at Futures International.

"The eastern Corn Belt should see the brunt of it by middle of this week, while the western Corn Belt will dry down by the end of the work week."

Meanwhile, cold temperatures could bring crop yield gains to a close in affected areas.

'May find support'

Why the corn harvest was so slow last week was that farmers were harvesting soybeans instead.

The USDA pegged the US soybean harvest at 70% complete, up 21 points week on week, and reducing to 3 points the lag to the average pace.

Investors were expecting only a 64% progress figure.

Still, the positive from the crop progress figure is that it means that pressure on prices from harvest is waning, offering the potential for a seasonal bounce in values.

"Technicals point lower for beans, but with harvest now 70% done, [futures] may find support and can correct at current levels as producer hedging winds down", said Benson Quinn Commodities.

In fact, soybean futures for November were 0.2% lower at $9.78 ¾ a bushel.

Sowings progress

Chicago wheat futures for December, like those of corn, were down the minimum 0.25 cents, touching $4.36 ½ a bushel.

The USDA crop progress data actually showed a faster-than-expected pace of sowings last week, with 75% of winter wheat seeded as of Sunday, above forecasts of a 72-73% figure, if behind the typical 80% figure by now.

That is a negative for values, with stronger seedings cutting the threat of farmers ditching plantings of the grain, with crop insurance dates now passed for many major growing areas.

Still, rains this week could put plantings on the back foot again.

'Important session'

One supportive factor for the wheat, like corn, is that the headway in the last session came not just from short-covering, and closing of long soy-short grain spreads, as some commentators had suspected.

Certainly, open interest, ie the number of live contracts, in soybean futures did fall in the last session, by 4,666 lots, according to exchange data.

But in Chicago wheat, open interest rose by 5,451 contracts, and in corn by 4,209 lots, suggesting fresh buying was in order, and undermining (understandable) talk of funds abandoning grains for markets deemed more volatile.

Benson Quinn Commodities said that overall, "the technicals in US wheat futures are offering an opportunity for a better correction, which makes Tuesday's session important".