{"id":3615,"date":"2024-09-04T11:49:22","date_gmt":"2024-09-04T16:49:22","guid":{"rendered":"https:\/\/agrilife.org\/agecon\/?p=3615"},"modified":"2024-09-04T11:49:22","modified_gmt":"2024-09-04T16:49:22","slug":"cotton-production-and-market-update","status":"publish","type":"post","link":"https:\/\/agrilife.org\/agecon\/cotton-production-and-market-update\/","title":{"rendered":"Cotton Production and Market Update"},"content":{"rendered":"
\"Picture

Aug. 9, 2022 in College Station, Texas. (Sam Craft\/Texas A&M AgriLife Marketing and Communications)<\/p><\/div>\n

Last month, USDA released two important reports: the monthly Crop Production<\/a> report, and the latest World Agriculture Supply and Demand Estimate<\/a> (WASDE) report.\u00a0 In this post, we discuss what these reports say about cotton production in 2024.<\/p>\n

<\/p>\n

<\/h3>\n

 <\/p>\n

 <\/p>\n

Cotton Production Update<\/h3>\n

The August Crop Production Report is an important one for cotton.\u00a0 In it, USDA provides their first production estimates based on current crop conditions, rather than historical trends.\u00a0 For this reason, we might consider the August report the first \u201creal\u201d look at cotton production for the year.<\/p>\n

What\u2019s in this year\u2019s report for cotton?\u00a0 First, the report revised the total number of cotton acres planted in the United States downward.\u00a0 The June acreage report estimated total cotton area planted at 11.67 million acres.\u00a0 In contrast, the August Crop Production report estimates 11.17 million acres planted.\u00a0 For upland cotton, the June report estimated 11.49 million acres planted, whereas the August report estimated 10.97 million acres planted.\u00a0 This revision represents a 4% decrease in USDA\u2019s estimate for cotton acres planted in 2024.<\/p>\n

How much can we expect these acres to produce?\u00a0 The August report estimates harvested acres for all cotton at 8.6 million acres and harvested acres for upland cotton at 8.4 million acres.\u00a0 Based on these estimates, it seems that USDA expects about 77% of all cotton acres planted this year to be harvested.\u00a0 For context, the May, June, and July WASDE reports assumed that about 82-85% of what was planted would be harvested based on historical trends.<\/p>\n

The expected average yield given in the August report is 840 pounds\/acre for all cotton and 828 pounds\/acre for upland cotton.\u00a0 If the values for harvested acres and yield are accurate, we can expect the United States to produce 15.1 million total bales of cotton, including 14.6 million bales of upland cotton, in 2024.<\/p>\n

For the state of Texas, the report estimates the number of upland cotton acres planted at 5.95 million with acres harvested at 3.65 million.\u00a0 This is 450,000 acres fewer acres planted than was reported in June, a 7% decrease, and a projected 39% abandonment rate.\u00a0 The report estimates Texas\u2019 average yield at 592 pounds\/acre and estimates total production at 4.5 million bales, a 66% increase from last year.<\/p>\n

Current WASDE Estimates<\/h3>\n

We can see the impact of the above estimates on U.S. cotton ending stocks in the August WASDE report (Table 1).\u00a0 The downward revisions to planted and harvested acres bring production down almost 2 million bales relative to the July projection.\u00a0 This is offset slightly be greater than expected beginning stocks, so total cotton supplies show a 1.79 million bale decrease.\u00a0 Meanwhile, total use is revised down by 1 million bales based on fewer exports.\u00a0 As a result, ending stocks decreased by 800,000 bales relative to the estimate reported in July.<\/p>\n

\"Table

Table 1. August 2024 WASDE Summary for United States Cotton<\/p><\/div>\n

 <\/p>\n

Cotton Market Outlook<\/h3>\n

How did the markets respond to this news?\u00a0 Figure 1 shows how the ICE December 2024 cotton contract traded during the weeks of August 12-16, August 19-23, and August 26-30.\u00a0 The Crop Production and WASDE reports were both released on August 12 at 11:00 am CST.\u00a0 At that time, the contract price jumped up quickly but fell back to where it had been trading that morning just as quickly.<\/p>\n

\"Figure

Figure 1. ICE December 2024 Cotton Contract Prices, August 12-30, 2024<\/p><\/div>\n

 <\/p>\n

However, since August 16, the December contract price had been moving upward.\u00a0 At this point, the downward trend the December contract price followed since March appears to have shifted into more of a sideways pattern.\u00a0 Whether this represents a real change in the contract\u2019s price trend remains to be seen.\u00a0 As they make harvesting decisions this year, producers should continue to monitor the price in their area and consider how the price movements that have occurred since February have changed their breakeven yield on harvest costs for this year\u2019s crop.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last month, USDA released two important reports: the monthly Crop Production report, and the latest World Agriculture Supply and Demand Estimate (WASDE) report.\u00a0 In this post, we discuss what these… Read More →<\/a><\/span><\/p>\n","protected":false},"author":2184,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[31,19],"tags":[],"class_list":["post-3615","post","type-post","status-publish","format-standard","category-business-management","category-cotton","entry"],"acf":[],"yoast_head":"\nCotton Production and Market Update - Ag Economics on the Plains<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/agecon\/cotton-production-and-market-update\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cotton Production and Market Update - Ag Economics on the Plains\" \/>\n<meta property=\"og:description\" content=\"Last month, USDA released two important reports: the monthly Crop Production report, and the latest World Agriculture Supply and Demand Estimate (WASDE) report.\u00a0 In this post, we discuss what these... 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