Where is the 2023 Cotton Market Headed?
March 29, 2023 Uncertainty is ruling the cotton landscape as the 2023 planting season begins.
With all eyes on the Mar. 31 release of USDA’s 2023 Prospective Planting report, a general sentiment among stakeholders is that U.S. cotton producers are expected to plant fewer acres to cotton than what was planted in 2022.
In discussions with cotton producers and economists during the recent 66th Annual Meeting of Plains Cotton Growers (PCG) in Lubbock, most agree that cotton planting decisions will be predominantly determined by rain and the weather during the planting season.
As cotton consumption is based on discretionary spending by consumers, global and regional economies also play roles in how the landscape will shift. China remains a dominant player in the cotton and textile marketplace. But, with not much transparency in data coming out of China, it is difficult to judge the actual revival in spending there.
PCG President Martin Stoerner notes that geopolitical situations, market volatility, weather in Texas, and the economy will all have respective roles to play in the global cotton situation. With inflation in the United States still lingering at 5%, additional interest rate hikes may be expected which could tighten spending which, in turn, influences retail sales and demand for non-essential commodities.
The impact of the economy and weather will likely be visible in the USDA Prospective Plantings report.
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