There are so many questions remaining about the current crop that it seems crazy to be talking about 2019. But, for planning purposes, it’s never too early to be thinking about opportunities and risks. To begin with, the (still uncertain) size of the 2018 crop will influence the supply of next year’s balance sheet in the form of carry-in stocks that could exceed 4 million bales.
Then there is the question of 2019 production. Cotton prices have been relatively good during 2018. This is currently reflected by a relatively lower ratio of corn futures prices to cotton futures prices (Figure 1, x-axis). History suggests that when corn futures prices are this low in relation to cotton futures (presently a ratio of 5.1), we could expect cotton planted acres between 13 and 14 million acres (see the graph below). This might contribute to at least as much, if not more, cotton acreage planted in 2019.Source: Southwest Farmpress