Acreage Projections Keep Getting Better
February 23, 2010 As far as acreage projections are concerned, it just keeps getting a little better as each report comes out.
The Annual Cotton Grower Acreage Survey was released in the January issue and growers told us that they intended to plant 9.912 million acres this spring. Compared to last year’s USDA final planted acreage figure of a fraction over 9 million, I should have been willing to take our projection to the bank.
But we said then that we thought the figure was low, and other planting intentions reports have had acreage headed north since.
The reason we thought we were on the low end was because it was taken during October and November when Mid-South and Southeast growers were in the midst of one of the worst harvest seasons in history. It’s difficult to have happy, happy, joy, joy thoughts about a 2010 crop when your 2009 crop is wet, moldy and falling on the ground. Or when pickers are stuck in the mud.
The National Cotton Council’s 27th Annual Early Season Planting Intentions Survey was released in early February at the Council’s Annual Meeting in Memphis, and it showed that 10.1 million acres would be planted this spring. We cover the survey in depth in the March issue of Cotton Grower that went to press Friday, but you can see the complete numbers now at: www.cotton247.com/acreage.
USDA will release its planting intentions report March 1, at 7:30 a.m. CST, but preliminary indications are that its projection will be 10.3 million acres, up nearly 13 percent from last year.
What’s driving acreage intentions up is improving supply, demand and competitive figures:
• Supply: Just two years ago, the U.S. had a 10-million-bale carryover, but by this marketing year’s end, it could be less than 4 million.
• Demand: Use will outpace production for the second straight year.
• Cotton prices have reached a point where it is competitive enough to be put back into the crop mix, at least for rotational and risk-spreading purposes. A private merchant’s report Friday morning said mills missed a golden opportunity over the past couple of weeks to price cotton for delivery this fall. The merchant thinks this could be very bullish and hints that we could be looking at a 2008 situation again.
Of course, what you’re reading is still a lot of “woulds,” “coulds,” and “intends.” And the word “hint” was used in reference to ’08 and dollar cotton. But as the clock keeps ticking down toward planting, and the “projections” keeping going up, the closer I come to taking them to the bank.
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