The US Agriculture Department will probably reduce its estimate for US 2008/09 cotton sowings, but industry analysts wonder whether the severe damage in Texas cotton farms will make it into the report. USDA will issue its annual planted acreage report at 8:30 am EDT (1230 GMT) on Monday.
Most analysts feel US cotton plantings will reach 9.1 million to 9.2 million acres, but some believe the report will show sowings as low as 8.45 million acres. Last March, the USDA pegged US cotton plantings at a 25-year low of 9.39 million acres.
"It will be a good picture, but the question is how much of the damage (in Texas and other states) can they incorporate in this report," Carl Anderson, an influential economist who used to work with Texas A&M University, told Reuters. The crux of the question is Texas, where hail, blowing wind that scythed through emerging cotton plants, and extreme heat likely zapped production.
The state, already the largest cotton growing area in the country, is even more important this season because Texas will plant an estimated 4.7 million acres to cotton, which would be over half of the cotton sown in the United States. Anderson had said the losses could lead to a fall in US cotton output to around 12.5 million to 13.0 million (480-lb) bales, against the USDA estimate of 14.5 million bales in 2008/09.
With that in mind, some in the trade are wondering if the USDA will take the same tack it has taken to conduct special surveys in the Midwest to gauge the effect of devastating spring floods on the corn, soybean and sorghum crops. Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, calculated US cotton plantings at 8.475 million acres.
He said the USDA may not be able to account for the damage in Texas but believes the industry must begin making careful calculations about how badly US cotton output was hit. "I think, ultimately, the number will come under 8.0 (million acres)," said Brown.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, said the market would need to gauge the damage to irrigated cotton on the High and Rolling Plains of Texas, along with weather conditions in July and August.
"We have to wait until July or August to get a good handle on the situation," she said. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the USDA report on Monday will provide only the opening basis to discuss the US cotton crop. "It's not the final number. That's all it is, the starting point (for the crop)," he explained.
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