USDA released today itΆs much anticipated Acreage report. This is the first farmer-based survey estimate of actual acreage planted. Up to this point, the only numbers available and widely accepted have been USDAΆs Prospective Plantings estimates released back in March.

TodayΆs estimate for cotton is 10.251 million acres—16.8% below last season and 225,000 acres more than what farmers said they intended to plant back in March. Most pre-report opinions were that todayΆs number would be 9.5 to 10.5 million acres, so the 10.25 number falls within the range of most expectations.

TodayΆs estimate has been highly anticipated and uncertain due to the continuing drought in Texas, rainfall in the Mid-South that delayed normal planting progress, cool soil temps in GA that delayed corn planting, and important in some states, uncertainty in peanut contracts and competitiveness.

Also, cotton prices have strengthened and held during the planting period while corn and soybean prices have trended down.

Every state is down compared to last year except for Florida and a slight increase in GA.

The fact that US acreage is down is no surprise—it was just a matter of how much. Of 17 states, 7 planted less than the March intentions and 10 planted equal to or more. I personally thought the GA number would be at least 1.4 million. IΆm also surprised to see the 200K increase in Texas from the March number, and had it not been for Texas, US acreage would be about the same as the March estimate.

So, we now have a revised acreage figure to work from. The figure is within reason of most pre-report estimates. But we all know, this number is not the most critical one. As we now anticipate USDAΆs July and August production estimates, how does this change the estimate of acres to be harvested (in Texas) and US average yield?

These are they key factors that the market will react to. Dec futures (currently about 84 cents) have weakened recently but still hold above the 82 to 83 cent support level.