The month of June marks another set of USDA forecasts of supply and demand variables for 2014 crops.  For cotton, the report represented a bit of readjustment to the fundamental picture.  Back in May, USDA’s first comprehensive forecast was for a smaller U.S. crop below 15 million bales. Based on that report, and the tighter ending stocks that it implied, I was inclined to raise my price outlook at least a nickel. For example, I was thinking December ’14 cotton futures might trade between 75 cents on the low end and perhaps over 85 cents on the high end.

Well, longer term forecasts are always subject to a lot of uncertainty.  Starting around Memorial Day weekend, and in subsequent rain events, the Texas cotton has gotten off to a much better start than anybody would have previously expected. This is especially true in areas with extensive dryland acreage and later planting dates, like the Rolling Plains and South Plains.

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  What does this mean?  Nothing for certain, as there is still a long time left before harvest.  However, the surface moisture at least creates the possibility of more production. This year in particular, establishing stands of West Texas cotton would allow for any late summer El Niño moisture to influence yield.