As we move forward, there are several factors in play that will determine if we can hold this level, move even higher, or retreat lower.

• I think there’s beginning to be general consensus that the National Cotton Council’s 9.015 acreage number is too low. How much will we actually plant?

• What will be China’s policy on using its reserves? If for whatever reason that cotton will not be used, that changes the global supply picture significantly.

• How will prices at 85 (or higher should we dare to go there) vs. prices at 75 cents impact U.S. exports and China’s use of its reserves? As stocks move into the pipeline, this will act as a cap on price.

• What is the outlook for Southern Hemisphere (mainly Australia and Brazil) production? This crop will be harvested and available this spring and summer and compete for exports.

Planting decisions for 2013 will depend on costs, prices as we get closer to planting time and expected season average prices, yields, weather, and risk management (crop insurance).

It’s the nature of farming that you have to make a decision now based on a largely unknown future. Farmers make a decision to plant this much of one crop and this much of another based on prices they largely have no control over. Prices can change and you can end up looking back and saying you may have done it differently had you known how things would eventually work out.

In planting decisions, it’s “relative” prices that are important. The fact that cotton (Dec13 futures) is now about 84 cents is not as important as how that compares with other cropping alternatives. Corn (Dec13) was once over $6.50, but now stands closer to $5.50. Soybeans (Nov13) were once close to $14, but now stand at under $13. So, cotton seems to be getting “bullish” while corn and soybeans appear more “bearish”.

For many Southeast cotton growers, peanuts are also a very important crop. Peanut prices and acreage are expected to be down, but since acreage will be down, prices could strengthen a bit after harvest based on good demand and exports.