The February WASDE was pretty much of a nothing burger. The U.S. old crop cotton balance sheet did not change from the January forecasts. U.S. growers produced a 20 million bale crop in 2019, and that forecast is unlikely to change much. Demand uncertainty from Chinese tariffs has been replaced by uncertainty about the coronavirus impacts.

Fortunately, there has been some recent new crop cotton news to reflect on. The National Cotton Council released their benchmark grower survey results in mid-February which reflected grower intentions (circa early January) to plant roughly 13 million acres of U.S. cotton. 

NCC also published a new crop balance sheet forecasting an almost 20 million bale crop in 2020, and leading to 5.9 million bales of ending stocks. An outcome of similar ending stocks compared to the previous year suggests a similar futures price range between the low sixties and the mid-seventies. As discussed in previous columns, any fundamental reason for low-to-mid seventies futures prices opens the door to brief spurts higher under the influence of speculative buying.

In late February the USDA Outlook Forum projected similar U.S. new crop cotton numbers with 12.5 million acres planted, 19.5 million bales of production, and 5.3 million bales of ending stocks. If realized, such an outcome would also support a similar range of ICE cotton futures compared to the previous marketing year.

These new crop numbers seem pretty reasonable to me. The 19.5 million planted acres jibes with the current relationship of new crop corn and cotton futures prices. The market will likely focus on this acreage question around the March 31 and June 30 acreage reports from USDA. Those two reports, along with the May WASDE forecast, could be the springboard for price volatility.

For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at http://agrilife.org/cottonmarketing/.