The US government on Monday pegged 2014 US cotton plantings at 11.37 million acres (4.6 million hectares), up 9 percent from the prior year, pressuring benchmark cotton futures to December 2012 lows on expectations of higher supplies in the world's top exporter. The US Agriculture Department (USDA) hiked its estimates for 2014 cotton plantings from a March outlook of 11.10 million acres more than many anticipated.
The increase from last year's 10.41 million acres of plantings added to bearish expectations of a big boost in supplies in the world's top exporter in the 2014/15 crop year.
The most-active December cotton contract on ICE Futures US hit an over 1-1/2-year low of 73.30 cents a lb before settling down 1.34 cent, or 1.8 percent, at 73.51 cents a lb. "The number is negative, if not bearish," said Sharon Johnson, a cotton specialist with KCG Futures in Georgia. "It's fair to say with this increase alongside the better weather we've seen, we'll see at least another half a million bales (of production)," she added.
The USDA earlier this month forecast 2014/15 US cotton production to be 15 million bales, but much-needed rains in Texas at key times this season have raised expectations of lower abandonment in the top-producing state. Industry outlooks earlier this year called for a sharp increase in plantings due to falling prices last year of other competing crops, including corn and wheat.
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