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World Cotton Prices Forecast to Remain Flat

World Cotton Prices Forecast to Remain Flat

30 December 2014

GLOBAL - An analyst at Texas A&M University is forecasting cotton prices to remain flat heading into 2015 due to a large world supply.

Cotton prices are projected to remain flat heading into 2015 as China continues to hold large supplies of cotton and consumption rates remain low, according to a Texas A&M AgriLife Extension Service cotton economist in College Station.

Dr John Robinson gave a cotton outlook presentation at the 26th Texas Plant Protection Association Conference in Bryan recently.

TAMU Robinson
Dr John Robinson

He said: “The cotton market is not booming as yarn prices remain flat. We’re not in a recession, but in a period of low growth and modest consumption. We don’t see anything that would pull up cotton prices in the near term.”

Dr Robinson said speculative funds have been swinging from net short to neutral, and cotton futures have just hung in there around 60 cents.

Consequently, cotton has been ranging in the mid- to upper 60s, he said.

For now, Chinese policy is one of the major influencers of the market, he added.

“That, and the fact that more of the Chinese new crop cotton and reserves are getting used by China rather than buying US exports continues to weigh heavily on market prices,” he said.

“If you have cotton in the loan, I would think about selling it and maybe use a call option strategy,” he said. “The end of the year carryover is projected to be more than four million bales. That’s more than enough cotton to fulfill demand.”

The 2015 outlook has projections of 15 million to 16 million bales produced in the US, he said.

Dr Robinson said: “We will still plant plenty of acres despite projections of fewer planted acres. At least 15 million bales of production is projected for 2015.I don’t see any reason for new crop prices to be higher than old crop prices.”

Meanwhile, during the association’s awards luncheon, the Norman Borlaug Lifetime Achievement Award was given posthumously to the family of Dr Tom Cothren, a longtime Texas A&M AgriLife plant physiologist. Cothren came to Texas A&M in 1982 after serving on the faculty at the University of Arkansas. He received many honours during his years of teaching and research, including Fellow of American Society of Agronomy, Fellow of Crop Science Society of America, Outstanding Research Award in Cotton Physiology and the Special Achievement Award for Teaching from Texas A&M. He also served on the Faculty Senate at Texas A&M.

Texas A&M students were also well represented in the poster competition. First place winner was graduate student Kate Harrell from the department of entomology. Graduate student Kevin Cox from the department of plant pathology and microbiology was second place winner, and third place went to Blake Baumann in the department of soil and crop sciences. Josh McGinty and Silvano Ocheya received graduate student awards.

Texas A&M AgriLife Extension Service horticultural specialist Dr Joe Masabni received the association’s Academic-Agency Award. AgriLife Extension cotton program specialist Dale Mott, who served as association president for 2014, captured third place in the pest identification contest. Gary Bradshaw, consultant from Richmond, captured first place, while Webb Wallace, consultant from Harlingen, was awarded second place.

Larry McAnally received the TPPA Consultant Award. Donnie Dippel, president of the Texas Ag Industry Association, received the Ray Smith Leadership Award.

TheCropSite News Desk

Top image via Shutterstock

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