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Weather Extremes Threaten U.S. Cotton Acres
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Weather Extremes Threaten U.S. Cotton Acres
(Bloomberg) -- U.S. cotton acres could be the latest victim of the wild weather that’s already hampered corn plantings.Key American areas for cotton have seen different extremes of the weather spectrum. In the Midwest, relentless rain flooded fields. Meanwhile, parts of the Southeast have been gripped by extreme heat and drought. Both scenarios are terrible for farmers, who likely planted less of the crop than projected by the U.S. Department of Agriculture earlier this year, a Bloomberg survey showed.Plantings will probably reach 13.74 million acres, according to the average estimate in the survey. In March, the USDA forecast about 13.8 million acres. The agency is scheduled to release its updated outlook on June 28.Acreage will likely be “somewhat lower because of rains and other weather that forced some acreage to be replanted,” Louis Rose, director of research & analysis at Rose Commodity Group, said in an email.A number of acres in the northern Texas panhandle, north of Amarillo, as well as in Kansas and Oklahoma were not planted due to rainy and cold weather in May, according to John R. Robinson, a professor of agricultural economics at Texas A&M University. While Robinson had thought the USDA’s acreage estimate in March was too low, he now expects as many as 300,000 fewer acres were planted and the range to fall to 13.5 million to 13.7 million.The outlook for falling acres is a big shift from just months ago. When the USDA first estimated plantings in March, some analysts thought the agency’s figure was too low given that cotton prices in the first quarter had performed somewhat better than grains. Cotton futures have dropped about 16% in the last two months while corn has gained 28% and soybeans have risen about 6%.“When the March USDA planting intentions report was released, most people thought the acreage was a little light,” Hank Reichle, president and chief executive officer of growers’ cooperative Staplcotn in Greenwood, Mississippi, said in an email. “Because of the difficult planting conditions all across the cotton belt and relative crop price changes, that number is likely much closer to reality.”For the 11 states in which Staplcotn operates, the USDA in March estimated plantings would total 5.07 million acres. That number is “probably not too far off the mark,” Reichle said.“We don’t expect an increase” in the plantings figures, Reichle said. “There is no doubt that some cotton acreage in just about every state across the cotton belt didn’t get planted for one reason or another.”To be sure, not all market watchers expect cotton acres to take a major hit. Rabobank has lowered its estimate to 14 million acres, below its previous estimate of 14.2 million, due to rain delays, switching to soybeans and some land left unplanted. Still, the agricultural lender’s estimate remains above the USDA’s March figure. Rabobank, Texas A&M and Staplcotn estimates were not included in the Bloomberg survey.The “USDA’s initial 13.8 million acre figure is still considered too low,” according to Charlie Clack, commodity analyst for RaboResearch Food & Agribusiness in Sydney, who also expects abandonment to be lower than the government’s estimate. “Soil moisture profiles are very strong in a number of cotton regions, which should favor crop development and minimize abandonment.”Still, cotton planting was just 96% complete as of June 23, the USDA said Monday. That trailed the five-year average of 98% and last season’s pace of 99% at this time.(Updates with Texas A&M estimate in fifth paragraph.)\--With assistance from Kevin Varley.To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.netTo contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Reg Gale, Millie MunshiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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