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January 16, 2024
What will the new year bring? The most correct answer is uncertainty. Still, this is the time of the year to look ahead and make plans. When it comes to crop market outlooks, we are always in an unfolding information situation.
Weather and crop conditions are one of those things. We are still under an El Niño advisory. This raises the likelihood of wetter weather, especially in the winter. But that’s still a weather forecast, which has risk around it. (And no, I’m not getting into the theoretical difference between risk and uncertainty).
The risky variables that the crop markets will focus on are planted acreage, and then crop conditions, abandonment, and yield per harvested acre. We can expect some information updates. The first will be a flurry of market outlook presentations at Extension and industry meetings, starting with Beltwide in Fort Worth.
The National Cotton Council will release their planting intentions survey results as part of their mid-February economic outlook. Then, the markets will focus on three USDA milestone reports: 1) March 31 Prospective Plantings, 2) the May supply/demand report, and 3) the June 30 planted acreage report.
ICE cotton futures traders will be anticipating these milestone reports, and possibly reacting to them. While the price outlook is uncertain, this information flow during the first quarter and second quarter could lead to volatile trading. It often results in the highest prices of the season.
For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at http://agrilife.org/cottonmarketing/.
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