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NAM - Namoi Cotton Co-Operative

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"[Cotton] Prices in the last 30 years have only been above $600 a bale about 10 per cent of the time. We’re in rare air above $650”
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Adam Kay, CEO, Cotton Australia [peak industry body]
 
The high cotton prices are great for the farmers planting the cotton, but the high prices only affect NAM in a sort of roundabout way.
The high prices encourage more plantings , which is good for them as the incremental costs go down as throughput increases.
It will also help their cotton seeds sales, as well as their marketing arm.
Mick
 
NAM hit another 52 week high today.
Was talking to an AG pilot this morning.
He has so much potential work lined up for the cotton season, he is desperately looking for experienced US and Canadian pilots for pre harvest cotton defoliation.
With so much water around, should be a good season.
Mick
 
NAM quarterly out.
Much better quarter than last year, ginning nearly 500k bales versus last years 124 k bales.
The forecast for next season is for 4.6million bales, just shy of a tenfold increase.
Kinda surprisngly, the market was not impressed after hitting another 52 week high, it fell about 8%.
Maybe the market did not like the fact that free cah flows were negative for the quarte as they gear up for the season.
Or perhaps the fact that floods in NSW and Queensland may cause a drop in the forecast ginning.
Was gonig to add more, but held off.
There might be further falls yet.
Mick
 
As stated by Mick, thinly traded, however, that may change.
Chart looking ok, just sitting on bottom of range, which ain't bad for the tizz we've just had...



 
yes cotton prices are at multi-year highs , just like several other commodities

just maybe it could get exciting
 
Cotton futures rose for the seventh straight month, the best run since 1959.
Whatever the reason for the price increases in cotton (and there have been many stated), the end result is that standard items like Americas
staple workwear, blue jeans, is going to go up by somewhere near 10%.
"Supply disruptions and soaring costs pushed the industry to draw on stockpiles, which have practically vanished at ICE Futures U.S., with higher prices unable to lure supplies into the exchange-tracked warehouses," Bloomberg said.
High prices for the fiber indicate inflation is coming to shirts, blue jeans, dresses, sweats, and so much more.
Demand for cotton worldwide "is simply not being met," said O.A. Cleveland, a consultant and professor emeritus at Mississippi State University.
"Industry group Cotlook on Friday shifted its global outlook for 2021-22 back to a deficit, the second shortfall in a row, citing diminished production in top exporter U.S. and India. More plantings in the coming season have been put into question by soaring costs for crop inputs including fertilizer," Bloomberg continued.
Cleveland said the cotton dynamics are "extremely bullish," and the "last time I recalled such a situation, I stopped forecasting futures prices once the market reached $1.50 a pound. Will the May or July futures price ascend to such a level? I do not know. This is a no man's land."
It's still unclear how consumers will act when their favorite clothing brand prices continue to rise. But since clothes are considered discretionary spending, there will be a point where consumers will buy fewer of them due to higher prices.

May well be good for Namoi.
Mick
 
From ABC News

Flooding in some areas of NSW does not seem to have affected production (yet), so fingers crossed the prices stay high and we get a bumper crop.
Mick
 
NAM quarterly cash activities out.
Gearing up for start of harvesting season to start in a few weeks.
Nothing terribly exciting, except for the statement that they expect the cotton production to top 5 million bales, compared an historical average of 3.5 million bales, so obviously any losses due to floods were minimal.
My aerial ag spraying mate still flying max hours per month, so things look good.
Still holding.
Mick
 
missed my target price ( so far ) when attempting to open a position here

a long time between divs. keeps my target price fairly low ( mid 30 cents a share )
 
Fin Year report out.
Big increases in everything, which is not surprising as it was coming off such a low base during a prolonged drought.
Expecting a 5 mill bale thus year, and forward estimates are suggesting another above average year in 2023 given the continued water availability and demand for cotton.
Might even see a renewal of dividends next year.
Mick
 
Got out of NAM today after it hit 17% above my last buy in price.
May well go higher, but I don't like to be too greedy.
Mick
 
Back into NAM as cotton prices are soaring again.
from Zero hedge

The US based National Weather Service's Climate Prediction Center as well as the Oz BOM have upped the chances of a threepeat La Nina event this year to 70%.
Generally, these events signal more rain for the East Coast of Australia, and less rain for the west coast and mid west of the USA, so the droughts do not appear to be ending anytime soon.
Mick
 
SPP at 43 was not what I was looking for.
Won't take it up, and will look to exit with hopefully a small profit.
Mick
 
NAM released quarterly results.
Like so many othe Ag industries, the massive wet this winter/spring has curtailed what looked like a record harvest, and also impacted seed plantings for next year, but it should be a greatly improved reult next year, as much of the receipts from this season will be pushed into next seasosn results.
Still looking to exit with a small profit if it can get to .58
Mick
 

NAM released quarterly activities provides a slightly improved ginning forecast, with ABARES forecasts of cotton planting increasing.
Problem is, in a good year for cotton, they still managed a negative cash flow.
Sold out the few I had left this morning as part of my pre EOY cleanup.
Will be unlikely to waste any more money on this one.
Lesson learnt.
Mick
 
WEll, it looks like NAM will join the long list of Aus companies taken out by overseas interests.
From ABC News
The SP had been in decline since late 2022 when the first rumours of a an end to the cheap water as the La Nina was coming to an end to be replaced by drier times of El Nino.
The stock shot up when first news of the offer came in, but it still sits below the recent ATH.
The suitor already owns three other ginning plants in NSW and Queensland.
Mick
 
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