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Planting cotton on the Texas South Plains.

Cotton Spin: Getting back to normal

Sources of public information on crop markets restored following the conclusion of the government shutdown.

In some ways, agricultural commodity markets are getting back to normal. When the federal shutdown ended, several regular sources of public information on crop markets were restored.

USDA resumed weekly export sales and shipment reporting for cotton.

The first three reports, released between Jan. 31 and Feb. 14, reflected strong cotton export sales and shipments in late December and early January. The USDA set Feb. 22 as Super Exports Reporting Day, when six weeks’ worth of export sales and shipments will be published. This big catch-up report creates the possibility for a discrete change in trend, and hence a surprise. Markets normally react to information surprises with volatile price movements, so we’ll have to see what happens.

The U.S. Commodity Futures Trading Commission (CFTC) is also playing catch-up with its reports. The CFTC normally publishes a weekly report on the position of speculators in ICE cotton futures. The snapshots from December show the hedge funds are net short for the first time since 2016.

CFTC also tracks the pace of cotton merchant contracting with mills in the weekly Cotton on Call report. CFTC is producing two reports per week until they are caught up. There appears to be less room for surprises with this approach.


And finally, after skipping the January WASDE report, USDA’s World Agricultural Outlook Board released neutral looking U.S. cotton supply and demand numbers. The 2-plus million-bale increase in foreign ending stocks would normally have had a bearish implication, although it was perhaps tempered by being spread out over a two-month time frame.

As of Feb. 14, it appears that the federal government will avoid a second shutdown. Hopefully, the flow of public information that informs the agricultural economy will be maintained.

The U.S.-China trade conflict is the big remaining question. If an agreement over commodity tariffs can be reached before March 1, that would represent a huge resolution of uncertainty. It would let the U.S. take advantage of expanding Chinese demand for imported cotton. It would also enable U.S. cotton shippers to begin to regain market share, especially before a big Brazilian crop comes on-line. And it would enhance the negotiating position of U.S. shippers with their other foreign customers.

All of this might create more opportunities for U.S. growers to forward contract new crop cotton while prices are still in the 70s.

For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at


TAGS: Outlook
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