By admin       2017-04-06

While growers intend to substantially increase acreage of cotton and peanuts this year uncertainty remains. For cotton, the pace of plantings, crop conditions, the pace of exports, and global (i.e. China) inventory levels are key fundamentals to monitor. For peanuts, higher acreage does not mean substantially higher production as crop yields and acreage abandonment may reduce the crop size. Managing risk is key. For peanuts, price risk is managed through the 2014 Farm Bill’s Price Loss Coverage and marketing loan programs. Without a Farm Bill Title I program, cotton growers have risk management tools including Title XI crop insurance products such as revenue protection and STAX as well as Intercontinental Exchange futures. Review of Cotton and Peanut Acreage IntentionsGlobal cotton inventories are currently projected to be down nearly 20 percent from the high set in 2014 at 90.482 million running bales (RB). To say the pace of U.S. cotton exports for the 2016/17 marketing year have been strong is an understatement. USDA’s March 30, 2017 export sales data reveals total export commitments of 12.3 million RB, 93 percent of the WASDE projection for the year and 71 percent above last year’s levels. Based largely on these fundamentals, new-crop cotton futures prices have been trading 15-20¢ above the 2015/16 marketing year average price of 61.2¢ per pound, Figure 1.

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