REPRESENTING COTTON GROWERS THROUGHOUT ALABAMA, FLORIDA, GEORGIA, NORTH CAROLINA, SOUTH CAROLINA, AND VIRGINIA
COTTON MARKETING NEWS
Volume 16, No. 11
Sponsored by
Hurricane Florence Impacts and
Early Fall Pre-Harvest Outlook
Our thoughts and prayers go out to everyone but especially our
fellow farmers and cotton producers in North Carolina, South
Carolina, and Virginia.
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.
The storm is slow moving—meaning that it will dump a lot of rain
and there will be high winds for several days.
Accumulated rainfall from this storm is expected to total 12-18
inches or much more in some areas and accompanied by high
winds. Most areas, even if not in the most heavily impacted area,
are expected to receive totals of 5-12 inches of rainfall.
It looks like Georgia may be fortunate to escape the brunt of any
major impact on crop production:
“I am relieved to say that with the current path of the storm,
impacts on most of Georgia are now expected to be
minimal. Eastern counties will still experience some wind
September 14, 2018
gusts from the storm which could cause isolated power
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
the state should see no rain at all from the storm, which is
not good for areas that are currently suffering from dry
conditions. The southern half of Georgia should not
experience any significant impacts from the storm and
northern Georgia’s impacts will be small and limited in
space and time.”
Pam Knox, UGA Agricultural Climatologist
September 14, 2018
NC, SC, and VA are currently forecast to produce a total of 1.58
million bales of cotton this year. Recognizing the location of most
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
damage from sustained high wind can be significant—resulting
not only in lost lint from open bolls but also twisted and lodged
plants difficult to harvest. As of Sept 9, the NC crop was 43% open,
SC 28%, and VA 37%.
Market Update
The visions of a return to 90-cent cotton appear to be fading. The
good news is that the market is clearly showing signs of good
support at roughly 82 cents. Support is a good thing; but prices
(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