Still, in the cotton market, the Wasde is being seen as a potentially bullish factor, expected by investors to bring a 290,000-bale downgrade, to 5.51m bales, in the estimate for US carryout stocks from 2017-18, according to a Bloomberg survey.
This reflects ideas of an upgrade of some 300,000 bales, to 15.11m bales, in the US export forecast.
At a global level, the carryout forecast is seen downgraded by a little over 700,000 bales to 87.29m bales, reflecting ideas of a downgrade of nearly 1m bales, to 118.9m bales, in the output figure.
Amid what Benson Quinn Commodities termed “mixed and waffling trade” in many ag markets ahead of the Wasde, cotton starred, ending up 1.7% at 79.65 cents a pound in New York for March delivery – a contract closing high.
Sowings prospects for 2018
Not that the Wasde was the only cause for cotton bulls to cheer, with prices of synthetic rivals rising last month in the European Union and US, according to the PCI Fibres Synthetic Fiber Index, albeit with drops in Asia.
And Louis Rose at Rose Commodity Group reported that “bitterly cold temperatures have slowed ginning and classing progress across” the southern Plains cotton-growing areas, including top producing state Texas, and where some “harvest of the 2017 crop remains to be done” too.
Still, at a time when prices of alternative crops are depressed, making cotton potentially particularly appealing as a sowing choice this year, is the fibre’s rally sowing the seed of price falls ahead?
A survey by Cotton Grower magazine showed the prospect of further growth in US sowings of cotton this year, of 350,000 acres, with market talk placing Kansas as a potential hotspot for area growth.
Given the poor returns offered by wheat, of which Kansas is the top grower, this may not be so surprising.
Nor is the underperformance of new crop December 2018 cotton futures, which added just 0.3% on the day to 74.92 cents a pound, further enlarging its discount to the March lot, which has continued to grow since being established two months ago.