USDA Drops Cotton Production Estimate On Drought Fears
June 10, 2011 Bloomber News
In its latest report, USDA says cotton production will fall to 17 million bales, compared with 18 million estimated a month ago. Six analysts surveyed by Bloomberg News forecast 17.38 million bales. Crops in Texas, the biggest producing state, are suffering after the driest May since 1956, according to an agricultural program at Texas A&M University in College Station.
“It’s a very reasonable downward estimate,” said Chris Kramedjian, a risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee.
This will be the first time USDA has lowered its June production outlook from May since 1998, which was “also a severe drought year,” said Sharon Johnson, a senior analyst at Penson Futures in Atlanta.
“It suggests to me there will be additional cuts over time,” Johnson said.
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