U.S. planted cotton area came in lower than expected at 13.518 million acres, largest since 2011 when abandonment soared to 35.8% and record drought gripped Texas.
Cotton futures finished a wide-swinging session on the plus side Friday after USDA reported smaller-than-expected U.S. plantings.
Benchmark December settled up 37 points to 83.92 cents, around the lower quarter of its 251-point range from down 20 points at 83.35 to up 231 points at 85.86 cents. It dropped 138 points for the week and lost 782 points or 8.4% for the month.
Volume increased to an estimated 26,622 lots from 17,311 lots the prior session when spreads accounted for 4,279 lots or 25%, EFS 91 lots and EFP 111 lots. Options volume rose to 5,689 lots (2,561 calls and 3,128 puts) from 5,191 lots (2,102 calls and 3,089 puts).
Producers planted 13.518 million acres of upland and Pima cotton combined, up 7% from last year and the largest since 2011 when plantings were 14.735 million acres and abandonment soared to 35.8% and cut the harvested area to 9.461 million acres. Record drought in Texas played a big role in the 2011 abandonment.
The USDA estimate, up 49,000 acres from the March intentions, is below average expectations reported in a Bloomberg survey of 13.781 million acres and just below the low end of the range of pre-report estimates of 13.45 million to 14.137 million acres.
Standing acres and acres for harvest likely now will be the subject of much debate heading into USDA’s updated estimates on acreage, yields and production on July 12. Last year’s all-cotton harvested area of 11.1 million acres reflected an abandonment of 12%.
Upland plantings are estimated at 13.275 million acres, up from 12.36 million acres last year, and the Pima or extra-long staple area at 243,000 acres, down 4% from 252,500 acres in 2017.
Plantings of upland in Texas at 7.4 million acres, up from 6.9 million acres last year, account for 55.7% of the U.S. upland area. Upland growers planted a record 120,000 acres in Kansas and the highest in Oklahoma since 1956 at 720,000 acres.
The planted area is up from 2017 in most cotton states except for Arizona, California, Louisiana and Mississippi, USDA said. In California, lower than expected water allocations had an impact on planted acres.
In the southern region, excessive rainfall in early May saturated fields and delayed plantings. By the end of the month, dry conditions allowed producers to catch up quickly and get the cotton crop in the ground within the normal planting window.
In Texas, the High Plains experienced high temperatures and lack of rain during the early part of May. However, some areas received beneficial rain by the end of the month, though some dry areas remained.
By regions, upland plantings included 2.84 million acres in the Southeast, up 12.6% from last year’s 2.523 million acres; 1.915 million in the Mid-South, down 1.5% from 1.945 million; 8.24 million in the Southwest, up 8.7% from 7.578 million; and 280,000 in the West, down 10.8% from 7.578 million.
Producers planted 94% of their acreage with seed varieties using biotechnology, down 2 percentage points from last year. Varieties containing insect resistance (Bt) were planted on 3%, down 2 points; herbicide resistance on 9%, down 2 points; and stacked gene varieties containing both insect and herbicide resistance on 82%, up 2 points.
Certified stocks increased 839 bales to 92,799 on Thursday, the daily ICE report showed. Open interest increased 621 lots to 257,028, with July’s down 65 lots to 221 and December’s up 313 lots to 181,526.
Source: Agfax