facebook_pixel

Shurley on Cotton: USDA Planting Intentions In; Time for Market to Focus on Other Realities

By Dr. Don Shurley

Today’s (March 31) USDA Prospective Plantings report estimates that U.S. farmers intend to plant 9.55 million acres of cotton this year – down 13.5 percent from last year. This (9.55 million acres) is within the range of most pre-report expectations, but on the higher end of that range.

The National Cotton Council’s survey estimate back in early February called for a 14.6 percent decline in acres. At the USDA Outlook Forum in February, their estimate was down 12 percent. Most pre-report expectations were for a drop of 12 to 15 percent.

Some of the numbers in today’s report are a bit puzzling, but it is what it is. The Georgia estimate (down 20 percent) is a bit much. The increase in peanut and soybean acres don’t nearly fully account for the drop in cotton and corn acres – unless acreage is going to be left idle, and that’s a distinct possibility.

The market must now turn its attention to other matters. Today, new crop Dec15 futures are bumping 65 cents. We’ve visited this neighborhood before. Are prices going to trek even higher, and if so, when? If not, what’s the downside risk?

Reports are that corn planting is delayed in the Mid-South, and the planting window may be closing. Corn planting may also be delayed in some areas here in the Southeast. Will this acreage get planted to corn or switch to other crops such as cotton or soybeans? Could actual acreage planted to cotton be more than today’s number? As we move forward, market direction will focus on actual plantings and crop conditions.

Price direction will also focus on China acreage and production and their purchase of imports from the U.S. and elsewhere. Chinese acreage and production is widely expected to be down significantly. U.S. exports have been good, and China continues to buy.

Downside risk appears to be limited – not non-existent, but limited. A larger number in U.S. cotton acreage could provoke some downward pressure on price. But depending on China and other foreign production, it could provide larger export supplies and exports – especially of higher quality fiber.

2015 U.S. Cotton Planting Intentions and Comparisons

                                                 20131                    20141                  20152                    Change3

AL                                                365                        350                       300                     -14.3%

FL                                                131                        107                         90                      -15.9%

GA                                            1,370                     1,380                    1,100                      -20.3%

NC                                               465                        465                       375                       -19.4%

SC                                               258                        280                       235                       -16.1%

VA                                                 78                          87                         85                         -2.3%

TOTAL SOUTHEAST              2,667                     2,669                   2,185                        -18.1%

AR                                               310                        335                      230                         -31.3%

LA                                                130                        170                      130                         -23.5%

MS                                               290                        425                      350                         -17.6%

MO                                              255                        250                      175                         -30.0%

TN                                               250                        275                      170                         -38.2%

TOTAL MID-SOUTH               1,235                     1,455                   1,055                         -27.5%

KS                                                27                          31                        24                          -22.6%

OK                                              185                        240                      260                             8.3%

TX                                           5,809                     6,217                    5,715                           -8.1%

TOTAL SOUTHWEST            6,021                     6,488                    5,999                            -7.5%

AZ                                              162                        165                       115                           -30.3%

CA                                             280                         212                      155                            -26.9%

NM                                              43                           48                        40                            -16.7%

TOTAL WEST                          485                         425                      310                             -27.1%

TOTAL U.S.                         10,408                    11,037                   9,549                             -13.5%

 

1/Actual acres planted. Thousand acres.

2/Intentions, USDA – 3/31/2015. Thousand acres.

3/2015 from 2014

 

 

Shurley is Professor Emeritus of Cotton Economics, Department of Agricultural and Applied Economics, University of Georgia

Topics: ,

Leave a Reply

One comment on “Shurley on Cotton: USDA Planting Intentions In; Time for Market to Focus on Other Realities

Market Analysis Stories
Market Analysis

Shurley: The March to 80 Cents

April 23, 2018

With prices nearing 80 cents, it’s an opportunity to price part of your expected 2018 production and/or add to previous sales.

Market Analysis

Strong Demand, Drought Concerns Pushing Prices

April 14, 2018

Thanks to mill demand, shrinking quality stocks and increased drought concerns in the Southwest, cotton continues to post gains in spite of the selling pressure created by rolling positions to the July contract.

Market Analysis

Market Holds in Face of Tariff Rumblings

April 8, 2018

World consumption continues to support prices, but the mere suggestion of tariffs makes speculative fund managers nervous and increases market volatility.

Market Analysis

Cleveland: Prices Rally on USDA Acreage Report

April 1, 2018

USDA’s annual Prospective Plantings report pleasantly surprised the market, as seen by the price rally for cotton following the report’s release.

don shurley
Market Analysis

Shurley: This is Now USDA’s Number for Cotton

April 1, 2018

In my opinion, USDA’s March 30 Prospective Plantings report gets us much closer to what will eventually be the acres planted number.

Young Cotton Plant
Market Analysis

Cleveland: Start Pricing This Year’s Crop

March 24, 2018

Plant, plant, plant continues to be the motto. But it’s also time to add price, price, price to the discussion.

Market Analysis

Demand, Weather Concerns Driving Strong Trade

March 16, 2018

The market seldom sees a three-year price stream so favorable.

Around The Gin
Product News

FiberMax Honors One Ton Club Growers for 2017

April 17, 2018

The FiberMax One Ton Club recently honored 188 cotton growers who qualified for the club with their 2017 harvest results.

Product News

BASF Adds Engenia Spray Tool to Aid Applications

April 16, 2018

A new easy-to-use resource puts critical weather requirements for applying Engenia herbicide in one convenient location.

Product News

Reduce Timing Guesswork for Cotton Planting

April 16, 2018

Bayer’s online Cotton Planting Forecasting tool can help growers determine the optimal planting window to improve their chances at securing a strong stand.

Product News

Deltapine NPE Program Begins Class of 19 Evaluations

April 9, 2018

Nine Class of 19 variety candidates will be in growers’ fields this year as the Deltapine New Product Evaluator (NPE) Program kicks off its eleventh season.

Product News

Americot Expands Research and Sales Teams

April 5, 2018

Americot has added six new team members to the company’s research and sales staffs.

Product News

Greenleaf Introduces TipGuard Nozzle System

April 5, 2018

Greenleaf Technologies has introduced its new TipGuard System to protect spray tips from contact damage.

Product News

New BASF Reward Program for AR Growers Facing Dicamba Ban

March 27, 2018

BASF has revised its Grow Smart Rewards program to provide Arkansas growers alternative weed control solutions during the dicamba application ban from April 16 through October 31.

Product News

DuPont Vydate Products Fully Available for 2018

March 15, 2018

DuPont Vydate brand insecticide/nematicide products – including Vydate C-LV for cotton – will be fully available for sale and use during the 2018 growing season.

Latest News
Market Analysis

Shurley: The March to 80 Cents

April 23, 2018

With prices nearing 80 cents, it’s an opportunity to price part of your expected 2018 production and/or add to previous sales.

Market Analysis

All Eyes on the Southwest as Contract Periods Shift

April 20, 2018

Mother Nature’s willingness to drop water on the Southwest plains will dictate price movement, as the May futures contract expires and July becomes the spot month.

Market Analysis

Strong Demand, Drought Concerns Pushing Prices

April 14, 2018

Thanks to mill demand, shrinking quality stocks and increased drought concerns in the Southwest, cotton continues to post gains in spite of the selling pressure created by rolling positions to the July contract.

Market Analysis

Shurley on Cotton: More Tariff Talk

April 9, 2018

The jury is still out on whether or not the “verbal war” between the U.S. and China will actually result in tariffs, and what the impact on cotton will be.

Market Analysis

Market Holds in Face of Tariff Rumblings

April 8, 2018

World consumption continues to support prices, but the mere suggestion of tariffs makes speculative fund managers nervous and increases market volatility.

Market Analysis

Cleveland: Prices Rally on USDA Acreage Report

April 1, 2018

USDA’s annual Prospective Plantings report pleasantly surprised the market, as seen by the price rally for cotton following the report’s release.

Market Analysis

Shurley: This is Now USDA’s Number for Cotton

April 1, 2018

In my opinion, USDA’s March 30 Prospective Plantings report gets us much closer to what will eventually be the acres planted number.

Market Analysis

Cleveland: Start Pricing This Year’s Crop

March 24, 2018

Plant, plant, plant continues to be the motto. But it’s also time to add price, price, price to the discussion.

Market Analysis

Demand, Weather Concerns Driving Strong Trade

March 16, 2018

The market seldom sees a three-year price stream so favorable.

Market Analysis

Shurley: Pulling the Trigger on the 2018 Crop

March 16, 2018

Producing a cotton crop ultimately commits you to also sell the crop. But at what point do you say the price is “good enough?”

Market Analysis

Multiple Factors Driving Cotton’s Price Growth

March 9, 2018

The fundamentals of supply and demand – among other factors – continue to drive cotton prices toward the high 80s.

Market Analysis

The Market’s Advice: Plant, Plant, Plant!

March 4, 2018

As world and U.S. ending stocks continue to shrink, growers have an opportunity to price the 2018 crop in the low 80s.

Market Analysis

Trucking Issues Limiting Timely Cotton Movement

February 24, 2018

Demand continues to exceed expectations. But new trucking regulations are putting a damper on timely movement of cotton and other ag products.

Market Analysis

Cotton Prices Settle, Poised to Climb Again

February 16, 2018

The market’s downside move appears to be over, ending a three-week downturn.

Market Analysis

Cotton Futures Nudge Higher, Despite Forecast for Rising U.S. Sowings

February 13, 2018

Cotton futures nudged higher, despite a much-watched survey on U.S. sowings showing a seven-year high, as the estimate came in