With few catalysts to spark a rally in cotton prices over the near term, farmers can expect prices to hover between 65 cents and 78 cents over the next few months, according to a Texas A&M AgriLife Extension Service cotton economist at College Station.
“Overall, we have weak demand fundamentals,” said Dr. John Robinson, who was part of a panel of experts who spoke during the Ag Market Network’s roundtable at the New York Stock Exchange recently.
The Texas cotton crop has been hit hard with excessive hot, dry weather over the past 30 days. Harvest projections for Texas are 7 million bales on the upside, Robinson said. The low side would be the five-year average for Texas, excluding the 2011 drought, of about 5.5 million bales, he said.
“The U.S. Department of Agriculture has forecast 6.6 million bales in 2016, which is splitting the difference.”
Robinson said harvest activities have begun in South Texas and “they can take all of the hot weather they can to get their crop in.”
“They are looking at above-average yield potential,” Robinson said. “But the real bellwether has been the Blacklands region with 600-pound per acre yield potential.”
Robinson said the Blacklands region has a few areas that could surprise a lot of folks once harvest activities begin in another month.
“It’s been average to below average rainfall for the dryland crop in West Texas,” he said. “All irrigated acreage in West Texas is looking for pretty good outcome.”
Harvest activity in South Central Texas will begin in another 30 days or so. Robinson said timely rains will help boost yields leading to harvest.