The cotton futures market has shown monster volatility along with a mythological advance in price over the last few months. No wonder Mike Stevens, with Swiss Financial Services, called it a nine-headed hydra. “You cut one head off, and two more grow back in its place. It’s a complex market. It’s multi-faceted.”

The market also has some of the characteristics of another mythological creature, Medusa. If you stare at it too long, you’re apt to become paralyzed with fear.

With that, here’s some advice from top market analysts on where to focus your attention in 2011, which hopefully will keep your marketing plan from turning to stone.

Carl Anderson, professor emeritus, Texas A&M University is not only concerned about high prices pushing world cotton acreage and production higher this coming season, but also about a potential decrease in global demand. “Yes, it’s definitely cloudy, and I get a little nervous about what’s been going on recently. I certainly can say that we’re not expecting December 2011 to be close to a dollar a pound for very long.”

Anderson encourages producers to price new crop cotton at 90 cents or above “if they get the opportunity, either through forward contracting, or buying an out-of-the money put option. There’s also the possibility you could short the market and buy a call behind it.”

John Robinson, Extension economist at Texas A&M University, also thinks there’ll be a supply response to higher prices for December 2011 futures and believes futures could range from 80 cents to a dollar. “But quite honestly, it’s an uncertain picture. Nobody can make that call.”

 Robinson says a flexible pricing strategy “is the way to go. But personally I think history suggests that prices are going to be lower.”

Robinson says many producers are still uncertain about production costs for the upcoming season. “But 90 cents is a strong price that covers a lot of production costs in Texas, and I hope producers take advantage of it,” Robinson said.

“This is not just a once in a lifetime situation,” said Stevens, when asked what producers need to do about marketing. “This is a one time since the Civil War situation. It’s been described as a perfect storm, and a repeat of a perfect storm will probably not happen.”

If we stick to the Greek mythology theme, the god Proteus had the power to see into the future. If he could foretell floods in Pakistan or Indian export restrictions or a strong resurgence of demand, marketing cotton would be a lot simpler.

Stevens’ crystal ball is based more on rationality. “We will continue to have bullish fundamentals because it’s going to take a while to refill cotton’s pipeline. But if you see cotton at around a dollar, it’s certainly time to be doing something. It’s certainly not a time for greed. We won’t repeat this situation.”