We are now almost a month into 2022 meeting season. That means traveling around Texas (and Oklahoma) to discuss cotton supply and demand, and giving a perspective about price risk. But what is on the agenda is something labeled “Cotton Market Update,” and the expectation is that I will forecast where prices are headed. Kind of like the weatherman, but with less sophisticated computer modeling.
I do give price forecasts, but I put wide ranges around them with qualifications. I do that to protect myself because commodity markets are volatile (more so these days) and to demonstrate that nobody ultimately knows where prices are headed. You only ultimately know what the market is offering you right now. Right now, it’s signaling to plant more. Every grower in the world can see that signal.
The joke among traveling cotton market forecasters is that as soon as you leave the office, everything will change and your outlook presentation will be out of date. That has already been the case this year: I state that fundamental supply and demand outcomes could give us new crop futures prices in the 90s, with speculative spikes over a dollar. Then, POOF! Dec’22 is already at 98-something cents! I am writing this on a Monday, and I have three meetings between now and Friday afternoon. Murphy’s Law says that something dramatic and hard to explain will happen this week. If it’s in your favor, I’m happy for you, and you’re welcome.
For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at http://agrilife.org/cottonmarketing/.
Source: farmprogress.com