Cotton farmers are looking at one of their best crops in years at a time when prices have been moving higher due to “encouraging” developments in the world market.
Cotton farmers could be about to enjoy the best of both worlds, members of the National Cotton Council’s board of directors were told.
Cotton farmers are looking at one of their best crops in years at a time when prices have been moving higher due to “encouraging” developments in the world market, according to Gary Adams, vice-president for economic and policy analysis for the NCC.
“USDA’s latest numbers show 62 percent of the U.S. crop was rated good to excellent,” said Adams. “The percentage of poor to very poor has been increasing in the Southeast in the last few weeks. But overall this is shaping up to be a very good crop.”
Adams, speaking at the Council’s board meeting in Memphis, Tenn., said cotton prices have been moving back up in recent days due to a good export report. When Adams went to the podium at the Peabody Hotel, New York December futures were trading at 86.25 cents per pound. The A Index, a barometer of world cotton prices, has been around 90 cents per pound.
As a result of relatively good growing conditions, U.S. production could reach 18.5 million bales in 2010. That would be nearly 6 million bales higher than 2009’s crop.
U.S. cotton exports, meanwhile, could reach 15 million bales or 3 million bales due to continuing restrictions on India’s cotton exports, reports of flood damage in Pakistan’s growing region and the possibility of China buying cotton and adding it to its dwindling cotton reserves.