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Anderson: 2008 U.S. cotton market outlook is brighterBy Jennifer M. Latzke Carl Anderson, professor and Extension specialist emeritus, Texas AgriLife Extension Service, predicts the cotton perspective for 2008-09 will be bright for marketers due to decreased supplies, good demand and higher prices. Anderson addressed the Cotton Economics Symposium during the 2008 Beltwide Cotton Conferences Jan. 10. According to his predictions, the expectations of a decrease in supply due to reduced cotton acreage across the Belt will support December 2008 futures to increase about 10 cents per pound since August 2007, reaching 76 cents the beginning of this year. With high corn, soybean, and wheat prices, cotton acreages are being switched to grain, Anderson explained, and the result is in 2008 and 2009, cotton acreage is estimated to decrease to nearly 9.5 million acres, the lowest since 7.9 million acres in 1983. This is a 38 percent decrease since the 15.27 million acres in 2006. Anderson estimates with higher yields reaching an average of 850 pounds per acre, the U.S. cotton crop could reach about 14 to 16 million bales, with offtake at about 20 million bales. The U.S. cotton crop for 2008 hinges on the weather in Texas, Anderson said. Texas will plant more than half of the total cotton acreage in the United States in 2008 and 2009, and two-thirds of that crop, Anderson explained, is dryland. "The U.S. crop can vary by at least 2 million bales, depending on good or bad growing conditions across Texas," according to Anderson. Cotton stocks are shrinking, with foreign cotton mill use growing, which is a cause for strong support in the 75- to 80-cent range in December 2008 futures Anderson said. With a projected shortfall of 20 million bales from foreign production, there will be high demand for U.S. cotton exports.
Jennifer M. Latzke can be reached by phone at 620-227-1807, or by e-mail at jlatzke@hpj.com. 2/4/08 Date: 1/31/08
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