Cotton Acreage May See Modest 2010 Increase

September 2, 2009 07:00 PM

Charles Johnson, Farm Journal National Editor
The corn market crash could lead to a bump upward in 2010 cotton acreage.
"We are watching closely the relationship between expected harvest time prices of corn, soybeans and cotton,” says Mark Lange, National Cotton Council (NCC) president and chief executive officer.
"The last several years, those ratios have been very telling and we could watch the systematic drop in cotton acreage as a result,” Lange says.
"If the current ratios continue, we anticipate seeing a modest increase in cotton acreage in the Mid-South and Southeast, reversing some of the downward trend we've seen the last few years. That's good news for our cotton growers who also have investments in gins and cotton warehouses since there is not much you can do with those except run cotton through them,” Lange says.
Decreasing stocks could also put some punch into cotton prices. Gary Adams, NCC economist, anticipates U.S. stocks drawing down to 4 to 5 million bales over coming months from 10 million at the beginning of the previous marketing year. World stocks stand at 51% of use, still high but nearly 5% less than a year ago.
"That changes the tone of the cotton market to some degree. If we get a reduction in stocks on a global basis, that paints a scenario that's more supportive of higher prices,” Adams says.
The global economic crisis could continue to hold stocks high and cap cotton markets, however. Since the demise of most of the U.S. textile industry in the 1990's, the U.S. became the world's largest cotton exporter. This marketing year, the U.S. will export 10.2 million of its 13.2 million bale crop, according to USDA projections.
China buys more U.S. cotton than any other nation. Pinpointing China's use and needs is difficult. The economic recession clipped China's cotton textile exports for the first time in 13 years. USDA projects China's cotton imports at 8 million bales this marketing year, well below the 19.3 million bales the country imported in the 2005/06 marketing year. That means China could use less U.S. cotton for the foreseeable future, says Stephen MacDonald, USDA economist.
Any way you look at it, lots of question marks still face U.S. cotton as growers decide which crop to plant next year. Right now, however, some positive cotton prospects exist which were absent at decision time for the 2009 crop.

More Cotton News 
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You can e-mail Charles Johnson at

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