Cotton prices are poised to remain strong for the season ahead thanks to solid fundamentals and stiff competition from grain prices which could keep acreage from expanding too quickly, and possibly to bearish levels, said market analysts speaking at the Ag Market Network’s January teleconference.

But there is also a concern about a potential downside to high prices. Will consumers push back as higher prices move through the marketplace? Or will they go with the flow?

There’s little doubt that higher prices — at the time of this writing, December 2011 futures were trading at over a dollar a pound — will push U.S. and world acres higher this year, according to Jarral Neeper, president of Calcot.

Neeper expects an increase of around 15 percent in the United States, putting planted acres at about 12.8 million acres. “I think we’ll see a larger abandonment level in Texas, and not much of an increase in average yield, which would put the crop at somewhere between 19.2 million to 19.8 million bales. That’s not a huge increase over last year’s 18.3 million-bale crop.”

Neeper says with a 19.5 million-bale U.S. cotton crop, “we should see a pretty good export number next year, good consumption, and I would expect U.S. stocks to climb from a very tight 1.9 million bales to a more workable 3 million to 4 million bales.”

Neeper projects a 7 percent increase in world cotton acres, to about 87.9 million acres, despite the fact that two large producing countries, China and India, have little room to increase acres. World cotton plantings, “won’t be a record, but it will be close.”

Neeper expects to see a world cotton production number of around 124 million bales.