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REPRESENTING COTTON GROWERS THROUGHOUT ALABAMA, FLORIDA, GEORGIA, NORTH CAROLINA, SOUTH CAROLINA, AND VIRGINIA

COTTON MARKETING NEWS


Volume 16, No. 11 September 14, 2018

gusts from the storm which could cause isolated power


Sponsored by outages, but they are expected to be less than 40 mph.
Rainfall will be confined to the northeastern part of the state
and should amount to less than two inches in all. The rest of
Hurricane Florence Impacts and the state should see no rain at all from the storm, which is
Early Fall Pre-Harvest Outlook not good for areas that are currently suffering from dry
conditions. The southern half of Georgia should not
Our thoughts and prayers go out to everyone but especially our experience any significant impacts from the storm and
fellow farmers and cotton producers in North Carolina, South northern Georgia’s impacts will be small and limited in
Carolina, and Virginia. space and time.”
Pam Knox, UGA Agricultural Climatologist
September 14, 2018
The very latest projected path of the storm (as of this morning),
takes it along the NC coast then inland across virtually all of SC.
NC, SC, and VA are currently forecast to produce a total of 1.58
The storm is slow moving—meaning that it will dump a lot of rain
million bales of cotton this year. Recognizing the location of most
and there will be high winds for several days.
cotton production in these states (this is 2017 county production;
VA is not shown I assume to avoid disclosure of individual farms),
it appears that SC cotton will be subject to heavy rainfall as well as
NC. VA will receive less and east GA mostly 1-2 inches or less.

As we experienced with Irma here in Georgia last year, the


Accumulated rainfall from this storm is expected to total 12-18 damage from sustained high wind can be significant—resulting
inches or much more in some areas and accompanied by high not only in lost lint from open bolls but also twisted and lodged
winds. Most areas, even if not in the most heavily impacted area, plants difficult to harvest. As of Sept 9, the NC crop was 43% open,
are expected to receive totals of 5-12 inches of rainfall. SC 28%, and VA 37%.

It looks like Georgia may be fortunate to escape the brunt of any Market Update
major impact on crop production: The visions of a return to 90-cent cotton appear to be fading. The
“I am relieved to say that with the current path of the storm, good news is that the market is clearly showing signs of good
impacts on most of Georgia are now expected to be support at roughly 82 cents. Support is a good thing; but prices
minimal. Eastern counties will still experience some wind (Dec futures) have struggled to clear a hurdle at 85 cents—we’ll
first have to clear 85 if we hope to reach 90. Producers looking for
an opportunity to add on to earlier sales, support is good but a
rally is even better.

USDA’s September estimates raised the US crop to 19.68 million


bales—440,000 bales higher than the August estimate. The 2018
forecast yield was lowered just a bit but acres planted was raised
520,000 acres.

The US crop is still a big unknown. This is one thing giving us


support. Texas, as of Sept 9, is 62% poor to very poor condition.
The September USDA numbers lowered the Texas state average
yield to a projected 694 lbs/acre—down from 726, but added
roughly 200,00 more acres to be harvested.

US exports projected for the 2018 crop year were raised 200,000
bales from 15.5 million bales to 15.7 million. World demand is
strong but there is some skepticism within industry about whether
or not USDA is over-reaching a bit on its export number. 2017 crop
year exports were 15.85 million bales.

Compared to the August estimates, China’s production for this


season was raised 1 million bales; India production was
unchanged; Australia production was cut 550,000 bales and Brazil
raised ½ million bales; Chinese imports and use were unchanged;
Bangladesh and Vietnam imports were unchanged.

Although prices appear to have good support, producers should


be 50% sold or better at this point. The current level of prices (in
the 82 cent neighborhood) is disappointing compared to where
we have been. But if you’re not already at the 50% level, you also
need to think about guarding against this market going to less than
80 cents and you being at-risk with most of your crop.

On the other hand, if you are already 50% or more priced, rallies
to the 85 cent area could be a good opportunity to add further to
sales—unless you want to take the risk of holding out for 85 to
90—but then realizing you’re also taking the risk that the current
level of support will hold.

Professor Emeritus of Cotton Economics