USDA has offered a somewhat bullish report on the U.S numbers that saw production drop 250,000 bales; exports increased 400,000 bales and ending stocks cut 600,000 bales to 4.8 million bales.
In the January report, harvested acres were cut around 1 million acres as abandonment in Texas was more than earlier thought.
The overall yield was increased 73 pounds to 866 pounds per acre.
Tennessee was estimated at 934 pounds per acre, the second highest on record.
The projected price for the 2012/13 marketing year is expected to range from 66 to 71 cents per pound, increased 1 cent on the bottom.
Global stocks are projected to increase 2.08 million bales to 81.72 million bales. Globally, the stocks to use ratio is 77.1 percent, up 2.25 percent from last month.
Keep in contact with your cotton buyer on current quotes.
March cotton closed at 75.62 cents per pound, up 0.42 cents on Jan. 11, with support at 73.45 cents per pound and resistance at 76.96 cents per pound with a strong buy bias.
I would be 25 percent to 50 percent priced on cotton.
Continued strength in the market will need to be rewarded with pricing. Don’t let storage costs continue to eat into your value.
December cotton closed at 79.04 cents per pound Jan. 11, down 0.05 cents with support at 77.42 cents per pound and resistance at 80.06 cents per pound with a buy bias.
Over the past 31 years the average difference between the January projection for U.S. ending stocks and the final estimate has been 0.9 million bales with 9 years below the final estimate and 22 years above. These numbers can and will change, but do reflect the best information and estimates at the time of the report. The next USDA Supply & Demand report will be released Feb. 8, 2013.