Cotton Futures Causing Producers to Rethink Planting Intentions

Over the last month or six week’s we’ve seen cotton futures slide steadily, in the past couple of days there’s been a hole in the dam and prices have been in a free-fall. Michael Quinn, President & CEO of Carolinas Cotton Cooperative explains there’s several factors at play:

“We had made a low last December just above .84 cents, and just a couple of weeks ago, that low was taken out it brought in a lot of spec selling into the market. And in top of that, planting is progressing well across the United States, you’ve gotten some rain in the West Texas Area in the last couple of weeks giving the perception that their drought is breaking, obviously they’re going to have to have a lot more rain for that to come true, but the weather patterns have changed, so the market right now is anticipating that that is the case. Even though you have reduced plantings around the world, still using…going back to trend-line and average yields, it looks like the world will build ending stocks again this year.”

And so, where does Quinn see the end of the free-fall:

“Certainly don’t want to put a number on it today, with lock limit down at this point in time right now, but you have to think that around the 70-cent mark cotton should have some pretty significant value, of course that’s old crop, course new crop you may have to go below 70 cents, in new crop, the high 60’s. Then you’re getting competitive with some of the synthetic fibers.”

With prices lower than this time last year, and still falling, there is a possibility that producers that intended to plant cotton in the prospective plantings report released by USDA at the end of March…those producers will change their mind at the last minute, according to Quinn:

“I think some of that has already occurred, particularly with the price break two weeks ago, and the crop not totally being planted. I know that in North Carolina we’ve had significant rains in some areas over the last week, and some of those areas just got too wet and they couldn’t finish planting even what they wanted to. So, I’d suspect that acrage not at this late time now, it’s not going to be planted to cotton. it’s going to be planted to beans when it dries out. So, yeah, I think the acreage from the March USDA Intended Acreage, I wouldn’t be surprised if maybe it’s down from those numbers.”

Short season soybeans, or possibly grain sorghum in place of those cotton acres. But, Quinn says it’s an ever changing thing, the cotton market:

“The cotton market is a very dynamic thing, and what happens on the other side of the globe can have affects here on our markets, being very globalized the world we live in, so never a dull moment.”

Tomorrow we’ll hear from Gary Adams, chief economist with the National Cotton Council on Today’s Topic. is dedicated to serving the agricultural industry in the Carolinas and Virginia with the latest ag news, exclusive regional weather station readings, and key crop market information. The website is a companion of the Southern Farm Network, provider of daily agricultural radio programming to the Carolinas since 1974. presents radio programs, interviews and news relevant to crop and livestock production and research throughout the mid-Atlantic agricultural community.