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New strategies crucial in volatile cotton markets

Cotton experts will discuss strategies for hedging in volatile markets and provide a farm bill update and crop outlook at the Cotton Roundtable, Friday, July 25, 7:30 a.m. Central time, at the Intercontinental Exchange in New York City. Several listening options are available.

Perhaps the most important issue in the commodity markets today is how producers can develop new marketing strategies when traditional hedging opportunities are suddenly not available, noted Pat McClatchy, a broker with Rosenthal-Collins and moderator of the Cotton Roundtable.

McClatchy cited the market problems of early March when extreme price volatility nearly paralyzed forward contracting of crops. Suddenly, and almost overnight, producers faced a wider basis not as related to supply and demand as it was a year ago.

“Buyers are building their risk management premium into that basis,” said McClatchy. “They'll charge enough to the farmer so they can turn around and buy an option to protect themselves.”

McClatchy also noted that tight supplies for corn and soybeans will mean another year in which the cotton market will have to compete with high grain prices.

One question the experts hope to answer - what is the magical cotton price needed to deliver more cotton acres in 2009, when U.S. supplies when undoubtedly be dwindling?

Program speakers will include Carl Anderson, professor Extension specialist emeritus, Texas A&M University; Mike Stevens, Swiss Financial Services; Jarral Neeper, vice president, marketing, Calcot; and O.A. Cleveland, Mississippi State University, professor emeritus.

Special guest speaker will be Joe Nicosia, president and CEO, Allenberg Cotton Co.

There are several listening options. Call 888-889-5345 to listen over the telephone. When asked for the conference ID number, reply “Ag Market Network.” You can listen live over the Web at Or you can listen to a recording of the event around noon at

Questions to the panelists may submitted at the Web site, or submitted in advance by calling McClatchy toll free at 888-795-8071.

The event is sponsored by the Intercontinental Exchange, Certified FiberMax, Cotton Incorporated, Ag Market Network, and Farm Press Publications.

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