Sep 18, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

Cotton Rally Encouraging Farmers to Sow More

March 21, 2013
cotton field

March 21 (Bloomberg) -- The longest cotton rally in four years and a lingering drought in the southern Great Plains are forcing farmers in the U.S., the world’s biggest exporter, to reconsider a shift to other crops.

Planting may total 11 million acres, 10 percent more than a Feb. 22 government forecast of 10 million, said Jordan Lea, the chairman of Eastern Trading Co., an exporter in Greenville, South Carolina. Prices are up 37 percent from a 31-month low in June and heading for a fifth monthly gain, the longest since July 2009. Corn fell 3.4 percent since the end of October.

The price surge was the "number one" reason "for me switching back to cotton," said Randy McGee, 35, who farms 1,200 acres in Idalou, Texas. He’s ditching plans to sow corn and sorghum on 300 acres of non-irrigated land that he now plans to use for cotton. "December grain and corn prices aren’t looking too promising. I’m sending my seed back."

After the worst U.S. drought since the 1930s sent corn and soybean futures to records last year, the government said cotton planting would drop 19 percent in 2013 as farmers sowed more profitable crops and slowing demand in China, the world’s largest importer. The lingering dry spell in the Plains has left some areas without enough soil moisture to grow grain, and the rebound in prices sent cotton to the biggest gain this year of any commodity.

"Cotton has been buying acres since the beginning of the year," Lea, a former president of the American Cotton Shippers Association, said in an e-mail. "The forecast drop in acres was probably somewhat exaggerated."

Top Commodity

Cotton for May delivery fell 0.2 percent to 88.9 cents a pound on ICE Futures U.S. in New York, leaving the most-active contract up 18 percent this year, the most among 24 commodities tracked by the Standard & Poor’s GSCI gauge. Prices may reach 95 cents by the end of 2013, according to the median of 16 estimates from analysts and traders in a Bloomberg survey last month.

If the December futures contract tops 90 cents before the end of March, up from yesterday’s close at 87.98 cents, farmers will sow as much as 1.5 million acres more cotton than the government forecast, O.A. Cleveland, an agricultural economics professor at Mississippi State University in Starkville, said in a March 8 report.

The U.S. Department of Agriculture forecast an 18 percent drop in production to 14 million bales this year from 17.01 million last year, when farmers sowed 12.32 million acres. On March 28, the department will release its first estimate of planting intentions based on a survey of growers. In 2011, output was 15.57 million bales, after the worst drought in at least a century decimated crops in Texas, the biggest producer.

Texas Planting

Growers in Texas need to plant cotton as early as mid-May in some areas to qualify for crop insurance, according to Plains Cotton Growers Inc., an industry group in Lubbock. The state produced about 5.5 million bales last year.


Previous 1 2 3 Next

See Comments

RELATED TOPICS: Cotton, Marketing, Crops, drought

Log In or Sign Up to comment


No comments have been posted



Receive the latest news, information and commentary customized for you. Sign up to receive the AgWeb Daily eNewsletter today!.

Enter Zip Code below to view live local results:
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by|Site Map|Privacy Policy|Terms & Conditions