Out Months Promising for Cotton

Cotton acreage has plummeted over the past two years for one reason - prices have made grains more attractive. No hidden meaning there. It is what it is.

But if there is a ray of hope for cotton acreage to rebound it is that demand continues to increase, and at some point U.S. acreage has to rise to meet it. Some economists are saying that it will take 11 million acres of cotton in 2009 to simply keep up with the demand.

Shown here graphically, corn and soybeans two years out are worth less than today, while cotton is worth more. Is the market telling us that we’ll have enough corn and soybeans to meet demand, but not enough cotton? We can only hope.