Cotton analyst Mike Stevens says USDA’s most recent estimate of world ending stocks of 73.75 million bales “is bigger than anyone has ever dreamed.  In fact, the projected carryout is bigger than the entire world crop was 26 years ago. Most of the carryout comes from the cut in Chinese consumption, and there are some who think USDA may have been as much as 5 million bales too high on that number.

“We’re on a course that will eventually result in a big acreage cutback around the world. I assume this is a real wakeup to everybody. The only problem is that the markets are coming down with it.”

Anderson expects the cotton market to remain weak “until it reaches a bottom. It will then start its way up. That could happen before December, but it’s not likely.”

Anderson noted that China’s buying of cotton for its strategic reserve “has held the price up until now. China looks like it may use 41 million bales, and it looks like they’ll produce 30. China’s government has not indicated how it will manage its deficit production of about 11 million bales for 2012-13.”

On the domestic side, USDA projected U.S. ending stocks at 4.9 million bales, the largest of the last three seasons. USDA is forecasting a range for new crop cotton prices to producers between 65 cents and 85 cents.

Anderson noted that rains in Texas could add even more to USDA’s new crop production projection of 17 million bales.

“This week, (first of May), we are off to a pretty good start in west Texas, where we’ve had some widespread beneficial rains. This is very encouraging for producers in Texas, where the crop was less than 4 million bales last year. We are certainly looking at a 6 million bale crop in Texas.”

If the cotton market’s May slide was an overreaction to the downside, the market may react with bounces to the upside, Anderson noted. “If that bounce gets up there in the 80-85 cent range, it would be an opportunity for marketers to do something,” Anderson said.

Stevens sees December cotton trading in a range of 75-85 cents per pound. Cleveland sees a range of 74-87 cents, Anderson, 70-88 cents and Robinson, 68-85 cents.

(The University of Georgia's Don Shurley has also addressed the cotton market situation as it faces record supplies. Read his comments and marketing advice at http://southeastfarmpress.com/markets/cotton-market-takes-it-chin).

erobinson@farmpress.com