Rob Robertson Staff writer-Memphis Business Journal

2013 will likely be remembered as mixed bag for area cotton growers.

An unusually cool and wet spring lead to a later-than-normal planting season for most growers in and around the Mid-South. The late start pushed the harvest season back as well, but yields have so far been remarkably unremarkable.

A total 2.5 million statistical bales of cotton had been processed in the Mid-South region through December 1 this season (for the USDA, the Mid-South means Arkansas, Louisiana, Mississippi, Missouri and Tennessee). Yields and production in the South Delta were very good in 2013, while the late planting and wet conditions impacted some output in the North Delta.

Meanwhile, prices that had stayed up for most of the year (though not as high as 2012) fell back again in the fall. August was a particularly volatile month that saw December futures surge to 18-month highs then plummet to three-month lows in the space of about three weeks. Prices spent most of September climbing but fell back to new lows in October, settling in around the 77-79 cent range for the year.

Looking ahead, the recent run-up of the lead March futures contract back above 83 cents to near two-month highs this week holds the promise of a good start to 2014. Meanwhile the December 2014 futures contract — a good indicator for growers making acreage decisions this spring — is trading in the 76 cent range.

Traders and speculators continue to watch China and its large cotton reserve hanging over the market. China cotton policy and its state reserve will remain a major factor in the supply/demand scenario going forward into 2014.