“This does set us up for a surprise when they go out and measure in September. If there is a further change in the downside, I see it coming from west Texas related to the irrigated crop.”

The lateness of the crop in the Delta and Southeast is also a concern for Robinson. “Those crops got off to a late start. There was replanting in Georgia, rain and flood delays in the Delta. Those crops are doing better, but just the fact that those crops are late sets us up for more uncertainty. First of all, you need timely rain until the end of the growing season. You also need clear open weather for maturation in September and October.

“Will the Delta and Southeast get the weather they need to really mature a big crop, or will they come out with something smaller? Will there be more bales from that part of the world to offset more losses than we’re seeing from the Southwest?

“Those are questions that may not be resolved until the September, October and November reports. What it means is more than the usual amount of supply uncertainty. And it’s going to put more importance on the September, October and November USDA reports.”

Robinson noted that during drought years, USDA often revises production downward from the August report. “The adjustments have ranged from 2 percent to 10 percent lower. From 2004-2008, we tended to have an increase in production from the August estimates. In 2008, the final number was 15 percent higher. That’s the biggest historical percent change in either direction from an initial August number.

“On average, the percent change in any direction from the initial August estimate is around 8 percent. Right now, we’re working with an estimate of 16.5 million bales. A 10 percent adjustment is around 1.7 million bales, which would give us a crop of just under 15 million bales.”

Robinson says the supply uncertainty in the United States may not really matter all that much for price. USDA reduced foreign cotton production by about 1 million bales and decreased foreign consumption by about 1.5 million bales, with China accounting for a third, India a third and Pakistan, Turkey and Mexico for the rest.

The result was a slightly higher world ending stocks number, 52.66 million bales, than last year’s 51 million bales.

U.S. cotton could be slipping back into a role of residual supplier, according to Robinson. “If our production drops, exports will be adjusted accordingly, and the bottom line ending stocks remain in the neighborhood of where they are now. So I don’t think the world balance sheet is going to change much.

“We’re in an uncertain picture,” Robinson said. “It’s going to take time for things to unfold.”