US cotton sowings will rebound from a 22-year low, as price shifts encourage farmers to switch away from grains - but the shift will not be as significant as many observers believe, an industry survey showed.
US growers will plant 9.11m acres of cotton this year, up 6.2% from the 8.58m acres seeded for the 2015 harvest, the National Cotton Council said, following a farm survey.
The extra ground will come in part, in Texas, the largest US cotton-growing state, thanks to the sowing of fields left fallow last year thanks to flooding and sodden soils.
However, in the main, the increase reflects relative price moves, with cotton futures faring relatively well compared with other crop options.
New York cotton futures "averaged about 65 cents a pound during the survey period, "which is very similar to year-ago levels," said Jody Campiche, the NCC vice-president, economics and policy analysis.
"However, corn and soybean prices are 8-12% below year ago levels, so price ratios of cotton to competing crops are a bit more favourable than in 2015."
The council added that, besides the "weaker prices of competing crops", cotton was also being favoured thanks to "improved expectations for water and favourable planting-time weather".
Historically low
Nonetheless, the sowings estimated by the NCC would be low by historical standards, representing the third-smaller area on records going back a century, behind only last year's figure, and the 7.93m acres seeded in 1983.
The council's figure was below forecasts from some other observers, with a Bloomberg survey pegging sowings at 9.45m acres, while a Farm Futures survey published last week estimated plantings at 9.19m acres.
The US Department of Agriculture, in outline estimates published in December, pegged sowings of upland cotton only this year at 9.5m acres, compared with the 8.9m acres expected by the NCC survey (the balance of 595,000 acres representing seedings of extra long staple crop).
Such area ideas may prove too small to avoid a cut in US cotton inventories, which the USDA sees ending 2015-16 at 3.1m bales
Louis Rose, at the Rose Report, said last week that "we see planted area of 9.7m acres as likely sufficient to maintain US ending stocks near 3m bales".
Harvest prospects
The NCC said that production was likely to rise faster than area in 2016, assuming an "average" yield of 831 pounds per acre, up from the 769 pounds per acre achieved last year, and factoring in an 11% rate of abandoned crop.
Dr Campiche pencilled in a 14.0m-bale harvest, up from 12.9m bales produced last year, although remaining well below the 16.3m-bale result in 2014.
