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US ups cotton area hopes, amid raised price expectations

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US farmers’ higher-than-expected shift into cotton this year looks like setting a trend, with sowings over the next decade seen beating previous expectations, encouraged by improved price prospects, official data showed.

 

Early-release tables from the US Department of Agriculture’s Agricultural Projections to 2027 show a major revision to US upland cotton growings over the entire forecast period.

 

The forecast for sowings next year, at 11.2m acres, while representing a drop of some 1.2m acres year on year, is well above the 10.3m acres at which the USDA had previously pegged them.

 

And area will remain above previous expectations too, with 2026-27 seedings put at 11.3m acres, 1.3m acres more than had been forecast.

 

Price expectations

 

The increased area hopes come amid improved hopes for farmgate prices, now seen rising steadily from 63 cents a pound next season to 72 cents a pound in 2026-27, 4 cents above the previous forecast

 

And the extra sowings will boost output too, expected to remain strong for the ten-year forecast period, reaching 18.7m bales by 2027-28.

 

That compares with expectations of 17.4m bales for 2018-19, and an estimate of 20.7m bales for the ongoing harvest.

 

If these forecasts come true, it means nearly 25m bales of extra output over ten years compared to the previous estimate.

 

Rabobank forecast

 

The USDA’s expectation of a drop in US cotton sowings next year tallies with a forecast from Rabobank, which last week forecast a “1.2m-acre cut in US planted area”, a decline it saw driven by expectations of a weak start to 2018 for prices of the fibre.

 

The full USDA projection report will be released in February 2018.

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