US cotton plantings seen declining to 25-year low
US cotton plantings this year are seen dropping to a 25-year low and the recent violent gyrations in commodity markets will have little effect because American farmers already have decided what they will plant, industry analysts said on Thursday.
By Agencies |
NEW YORK: US cotton plantings this year are seen dropping to a 25-year low and the recent violent gyrations in commodity markets will have little effect because American farmers already have decided what they will plant, industry analysts said on Thursday.
The US Agriculture Department (USDA) will release its annual potential plantings report on Monday at 8:30 am EDT (1230 GMT) covering estimates on plantings for every product from corn to wheat. Most in the trade feel US cotton plantings will range from 8.8 million to 9.5 million acres, the lowest since 1983. Last year, sowings amounted to 10.8 million acres.
A strong rally in the grains market has lured US farmers away from cotton to other crops.
Mike Stevens, an analyst for SFS Futures brokerage in Mandeville, Louisiana, said the recent spike in cotton prices to above 12-year highs would not be a factor for farmers who have already decided what they will be planting this season.
���You can���t go back-and-forth, back-and-forth on what to plant,��� he said, adding there has been extensive switching out of cotton in areas of the Mid-South and the Mississippi Delta states like Louisiana. Stevens believes US cotton sowings this year will reach around 9.1 million to 9.2 million acres.
Sharon Johnson, a cotton expert for First Capitol Group in Atlanta, Georgia, pegged plantings at 9.3 million acres. ���If the recent rally had been more orderly, and, if futures values via options had not ���shot up��� as they did in early March, some merchants are reluctant to let producers book additional new-crop cotton due to market risk,��� she said in a report.
The US Agriculture Department (USDA) will release its annual potential plantings report on Monday at 8:30 am EDT (1230 GMT) covering estimates on plantings for every product from corn to wheat. Most in the trade feel US cotton plantings will range from 8.8 million to 9.5 million acres, the lowest since 1983. Last year, sowings amounted to 10.8 million acres.
A strong rally in the grains market has lured US farmers away from cotton to other crops.
Mike Stevens, an analyst for SFS Futures brokerage in Mandeville, Louisiana, said the recent spike in cotton prices to above 12-year highs would not be a factor for farmers who have already decided what they will be planting this season.
���You can���t go back-and-forth, back-and-forth on what to plant,��� he said, adding there has been extensive switching out of cotton in areas of the Mid-South and the Mississippi Delta states like Louisiana. Stevens believes US cotton sowings this year will reach around 9.1 million to 9.2 million acres.
Sharon Johnson, a cotton expert for First Capitol Group in Atlanta, Georgia, pegged plantings at 9.3 million acres. ���If the recent rally had been more orderly, and, if futures values via options had not ���shot up��� as they did in early March, some merchants are reluctant to let producers book additional new-crop cotton due to market risk,��� she said in a report.
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Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, feels that US cotton sowings this year will be even lower at 8.9 million acres. ���I just think we���re not going to plant a whole lot of cotton,��� he said. Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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