Sharon Johnson: USDA Report Preview
Thursday Trading Activity – US cotton futures were on both sides of unchanged in the first 14 hours of the session. Export data pushed prices higher only to run into selling and a loss of buying until 11:30 AM EDT when buying re-surfaced and by enough to push the two front months to limit up briefly. However, the May or Jul contracts closed 5 and 44 pts off of limit up and the December was only up 114 pts from a futures volume of 27,798 and combined option volume of 16,479. Cert stocks are shrinking a bit at 201,785 with only 2,556 under review.
PRE-USDA COTTON PLANTING INTENTIONS – The National Ag Statistical Service arm of the National Ag Statistical Service arm of the USDA will release the results of their surveys of US producers regarding various crops including cotton on Thurs, Mar 31. As they pertain to cotton, the industry range is 12.7-13.3 mln acres although I have heard some extreme numbers above and below that range. The incredible move in 2010/ 2011 cotton prices to not only new all-time highs but nearly double that of the 1994/95 crop year and its pull on new crop prices is behind the huge jump in 2011/12 area in the US.
This chart shows the rally in old crop prices with the blue trend-line cutting across most tops since 1990.
After additional discussions with maintaining my preliminary estimate at 13.2 mln acres.
Starting with the Southeast, my forecast is for an increase of 493K acres to 3.09 mln acres, its’ largest since the 2006 season. The increase is due to sizeable gains in NC, Ga, SC and Al in descending order. NC and Al are seen planting their largest level since the 2006 crop year. My 300K figure for SC is tied with that of 2006 and Ga at 1,440 is slightly above the 2006 level.
Moving onto the Delta, I look for acres to jump of 2.475 mln vs the previous year of 1.92 mln, an increase of 555K and its’ highest since 2007. Ms and Ark account for the lion’s share of higher area with the two commercial sources, extension personnel, etc, I am counting for 60% of the regional expansion. All states are expected to show an increase above and beyond that planted in the 2008-2010 crop years. Only Mo is likely to plant more than in the past 4 years.