Biggest changes were in LA, OK, SC and MO, all down 25%. Small gains were noted in KS, TN and VA. Mighty TX was down 11%, reflecting the avg.
The surprise in this survey was not in the numbers, it was in the reaction to them. Numerous writers in Cotton Grower, and other farmer publications, were calling for planted acreage as low as 10 M flat, down nearly 30%. We have been in the down 10% to 12% area since last fall, anticipating a small decrease, but nothing near 25% or 30%. Futures are 6% below the range of year ago, and ratios are less than that. A 12% decrease in acreage is a fair estimate.
We have not run a production estimate based on the acreage survey yet, but no doubt it will be an ugly creature based on averages. Last year the TX drought had been broken in winter, then it re-appeared in mid summer to wreak havoc on yields. Right now, soil moisture profiles are good, but its a long way before the Llano Estacado actually plants. The track of production estimates last year started with much above average yields, then cratered at the summer halfway mark to end the season with a dismal figure for both TX and the US. This year yield was much below avg, but 2 years ago yield set a record. Trend yield, if there is such a thing, is 870 #/a. But all yields since the breakout 04/05 year have been worst at 755 #/a, and best at 895 #/a. Above figures are upland only.
Mar reached the 62% retrace from Apr high to Aug low, and has also satisfied several other technical objectives. A seasonal high is due avg date 4 Jan. So far no reversal or top pattern has occurred, but we continue to believe a 5 wave move has completed, or is near completion. Mar has made 20 new highs since the Aug low, nearly matching Fib and candle numbers of 21.
Jan 07Have A Great DayCotton Traders
Trade With VB!
We clear and execute futures and options transactions for the cotton and fund industry at very competitive rates. Interested in setting up an account to trade or execute with us? Call our office manager today to discuss!
Futures and options trading involves substantial risk of loss, and may not be suitable for everyone.
Varner Brokerage, Inc. accepts no liability for any direct, indirect, incidental, or consequential damages or losses arising from the use of this report or its content. This report is not to be construed as providing investment services in any jurisdiction where the provision of such services would be illegal.