April 1, 2010
Underlying mill fixations, sturdy weekly export sales and brisk shipments offered support as cotton futures prices on the Intercontinental Exchange (ICE) rallied this week after prospective U.S. plantings came in on target with industry expectations. USDA’s March Prospective Plantings Report indicated that U.S. producers intend to plant a total of 10.51 million acres of cotton in 2010, up 14.8 percent from the previous year. Upland area was projected at 10.32 million acres, up 14.5 percent from 2009 while pima area was projected at 190,000 acres, a 34.1 percent increase. The National Cotton Council’s planting intention survey, released in early February, indicated that U.S. farmers intended to plant 9.92 million acres of upland cotton and 176,000 acres of pima.
Projected upland area of 2.39 million acres in the Southeast represented an increase of 26.4 percent from the previous year. All states in the region intend to increase cotton acreage in the upcoming season; however, the largest percentage increase in cotton acres is expected in South Carolina at 52.2 percent. The largest gains in actual cotton acres will be seen in North Carolina (+165,000 acres) and Georgia (+150,000 acres). In the West, California producers intend to plant 100,000 acres of upland cotton, up 40.8 percent from last year. New Mexico and Arizona plantings also are up with cotton plantings estimated at 35,000 acres and 185,000 acres, respectively.
In the Mid-South, projected plantings of 1.73 million acres represented an increase of 6.3 percent. The only decline in acres in the region was reported in Louisiana, down 13.0 percent to 200,000 acres. The largest acreage increase is expected in the Southwest. In Texas, producers intend to plant 600,000 more acres of upland cotton than they planted in 2009. Oklahoma also expects to increase acreage with plantings estimated at 240,000 acres for 2010. However, Kansas will be down roughly 8.0 percent from the previous year with 35,000 acres of cotton.
Applying a 2005-09 yield average of 822 pounds to the projected harvested area would mean an output of 15.92 million bales of U.S. cotton production in the upcoming year. Weather, obviously, could dramatically impact final production especially in view of the concentration of acreage in Texas.
With Texas expected to account for approximately 54 percent of the U.S. cotton area, and because it has wider variances in abandonment and yields, crop developments in the Lone Star state could swing production estimates either direction by several million bales, industry sources explained.
USDA reported four percent of the Texas crop had been planted as of March 28, up slightly from three percent one year ago but down from the six percent four-year average.
In other news, USDA’s export sales and shipment data for the week ended March 25 showed net upland sales of 207,300 bales for delivery in 2009-10. The figure was up noticeably from the previous week and 35 percent from the four-week average. Turkey, Bangladesh, Peru, and China were the top buyers for the week. Net sales of 62,800 bales for delivery in 2010-11 were mainly for Bangladesh, South Korea, and Indonesia.
Export shipments of 289,100 bales were down three percent from the previous week and from the four-week average. Primary destinations included China, Turkey, Mexico, and Indonesia. Closer to home, growers in Texas, Oklahoma, and Kansas sold 703 bales online in the week ended April 1 compared to the previous week when 3,058 bales were traded. Prices received by producers ranged from 64.92 to 66.75 cents per pound versus 62.23 to 73.39 cents per pound one week earlier.