Last year cotton prices hit more than $2 a pound only to see prices tumble to about $.906 for the nearby futures. The expected behavior by farmers is seen in recent crop acreage surveys. US farmers are expected to plant on 13.6 million acres down 7.5% from last year. In those areas where there is greater choice on what can be planted like the US southeast, the decline in closer to 13%.
However, given bad weather there can be a big difference between planted and harvested acres which will be the key driver of price this year. Last year saw one of the greatest divergences between planted and harvested acres because of drought.
Still cotton behaves according to the laws of supply and demand and when there is a lower prices supply will be constrained just a demand was curtailed when cotton was at $2 a pound.
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