In the Mid-South, spring weather has been more suited for catfish than cotton, with heavy and frequent rains thwarting every effort to shift planting into high gear. Texas cotton producers have the opposite problem and are desperately in need of moisture, while California growers have had nearly perfect conditions for cotton so far this season.

These were the observations of a panel of cotton analysts speaking on crop and market conditions at the Ag Market Network's May teleconference.

“It was great for catfish,” mused O.A. Cleveland, professor emeritus, Mississippi State University. “The fish are doing wonderful. They have plenty of water. We've seen it rain almost every day. We're totally waterlogged. Other than that, there aren't any conditions. Cotton is struggling and it's still a little cool at night.”

Mid-South cotton producers “are due for a break today (May 14) or tomorrow, and we should start to get some fieldwork done in three or four days,” Cleveland said. “We're still in front of May 20, and we'll be rolling soon. Most of the cotton land is on well-drained soil, so we'll be OK if we can get some dry weather.”

Cleveland says research shows that the later the planting, the smaller the eventual crop will be “however, the three largest yields historically in the Mid-South have been three of the later-planted crops. What happens in October is more important.”

Carl Anderson, professor Extension specialist emeritus, Texas A&M University says the Texas crop “is very questionable. We have lost most of our Coastal Bend cotton and south Texas cotton, which is around 400,000 acres to 500,000 acres. We also have a very questionable dryland area in west Texas, which consists of about 2 million acres. A large part of that is simply dry.

“We have to have rain in the month, to get that area started. If it doesn't happen, we could lose another 1 million to 1.5 million acres, which could take the U.S. crop size down as much as 2 million bales.”

Anderson sees USDA's estimate of a 13 million-bale U.S. crop “leaning more toward 11 million bales at this time. But remember, Texas always has an opportunity up until the middle of June to do a good job of making some dryland cotton.”

According to Jarral Neeper, president of Calcot, Ltd., “with few exceptions, cotton crop conditions in California couldn't be any better. We had a little bit of a strange spring, but we had a heat wave that hit right at the prime planting and emergence point. Whatever is up looks really good.”

The same goes for Arizona, Neeper says. “The crop has gotten off to a great start. Both Arizona and California growers couldn't be any happier right now.”

Analysts agreed that the market is going to watching weather in the Mid-South and Texas very closely over the next few weeks.

“The rains across the northern Delta probably means that acreage is going to be reduced there somewhat,” Neeper said. “Every time you take an acre away from some area other than Texas, it just makes Texas that much more important in terms of the total production.”

“The market will be looking at the June 30 planted acreage report and the August and September supply and demand reports,” said John Robinson, Extension economist, Texas A&M University. That's when any volatility to the upside could be happening.”

On the other hand, beneficial rains in Texas “could temper the upside potential,” Neeper said.

Mike Stevens, with Swiss Financial Services sees a possible bottom for December cotton futures of 55 cents. “I don't think we're going back to the 40s. We could see an upside of 65 cents.”

Stevens noted that hand-to-mouth buying by mills, “has worked so well for so long. But the mills have gotten way behind and this puts some support under the downside. You're going to have mill fixations coming in those down areas.”

Stevens added that a falling export report after a nine-day rally in the cotton market in early May, “validates the thought that we have priced ourselves out of the market.”

While purchases of cotton by both China and India to build inventory were at least partly responsible for the recent run-up in cotton prices, analysts are concerned about news that China and India are now starting to release some of those stocks.

Keep another eye on the size of the world crop, Anderson said, “Obviously, we have plenty of cotton to meet our needs at this time. But what if we don't have a good crop in the world? I can see the market getting a little bullish in the next couple of months into the mid-60s, and maybe higher.”

Neeper sees the December contract at somewhere between 52 cents and 54 cents on the downside with an upside potential of somewhere between 65 cents and 68 cents.

Another factor helping cotton is that the grain complex is pushing higher again, according to Neeper. “Soybeans could continue to be volatile with a bias toward the upside, which could help corn and wheat. If the grains remain relatively firm, that's going to help cotton.”

Another bit of good news is that in May, USDA raised its world cotton consumption number to 113 million bales. “Estimated world production was reduced to 106.5 million bales for 2009,” Neeper said. “This should be positive for the rest of the summer and into the new marketing year.”

On the impact of large fund buying on the market, Ag Market Network Executive Director Pat McClatchy noted, “Last year, and already again this year, we're seeing what they can do when they buy the market. We always seem to go higher than what we should go and we seem to go lower than we should go. So keep in mind that markets have the potential to move up considerably.”