U.S. cotton futures could “spend a lot of time” in a trading range between 76 cents and 88 cents a pound for the remainder of the 2013-2014 marketing year, which is not much above the latest close of 86.8 cents per pound (Jan. 21).
No one knows if they will get to 88 cents or even to 94 cents per pound, which was at the upper end of the possibilities listed by Calcot Limited President Jarral Neeper in his presentation at the Economic Outlook Symposium at the Beltwide Cotton Conferences in New Orleans.
Nor was Neeper predicting when they might fall back to the 69-cent area at the low end of the range. For now, Calcot and growers are glad to see a rally from the 77-cent area where they had fallen prior to the Christmas holidays. Futures had risen to 84 cents when Neeper spoke on Jan. 7 and have since climbed to the 86-cent area.
“One of the reasons I think prices are coming to life is that we just got a smaller U.S. crop and certainly we’re going to have smaller U.S. ending stocks,” he said. “Production of 13.1 million bales this year is the third smallest since 1988.” (USDA left the forecast basically unchanged in the Jan. 10 Crop Production Report.)