US cotton plantings seen at three-year high-Texglobe

NEW YORK (June 29 2010): Cotton plantings in the United States in 2010 will rise to their loftiest level in three years as high prices and ideal growing weather boost sowings, industry analysts predicted Monday. A Reuters poll of industry participants forecast 2010 cotton plantings would hit around 10.85 million acres, up 19.84 percent from the 9.054 million planted in 2009, which was a 25-year low.

If so, that would be the highest sowings since 2007 when 10.872 million acres were planted to cotton. The US Agriculture Department will release its annual planted acreage report on Wednesday at 8:30 am EDT (1230 GMT). "We're set to make a good (cotton) crop," said Carl Anderson, an influential economist with Texas A&M University.

He projected that cotton plantings in Texas, the top growing state in the country, would be revised up to 5.75 million to 5.8 million acres from an earlier forecast of 5.6 million acres. "Everything is lined up perfect for cotton," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

He said cotton futures, which were hovering near 80 cents a lb, have combined with ample moisture across the US cotton belt to boost expectations of a bumper crop. The analysts said that if acres reach as high as 11 million acres, that would mean a crop of 17 million or even 18 million (480-lb) bales, the highest since 2007 when 19.206 million bales were harvested.

Jim Nunn, an analyst for merchants Nunn Cotton Co in Tennessee, said he would not be surprised if plantings hit 11 million acres. "With new-crop cotton (futures) trading in the mid-70s (cents) and favourable top and sub-soil moisture (in the US Southwest, including Texas), producers made the decision to abandon wheat and replant to cotton," said a report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta.

Johnson added the "tricky part is in divining how much was switched" by farmers in the area. Analysts said the clear implication is that the cotton crop will be much larger and would hit a three-year high around 17 million to 18 million (480-lb) bales. Production in 2009/10 amounted to 12.4 million bales. The large cotton crop would manifest itself in the new-crop December cotton contract on ICE Futures US.

"The December should increasingly reflect the impact of a growing crop over the next several weeks although support at its 50 and 200-day moving averages at 77.59 and 74.75 (cents) should be sizable albeit temporary as will this month's low of 74.09 (cents)," Johnson said.