SUMMER croppers will be hoping extra hard they get the opportunity to plant in 2018-19 with both sorghum and cotton prices pushing to multi-year highs.
Sorghum values have been in the headlines recently, briefly reaching $400 a tonne for old crop, but this week it is cotton’s turn in the spotlight.
Cotton futures on the New York Stock Exchange reached four year highs this week, with the market going limit up for all 2018 contracts on Monday.
This means all 2018 cotton futures contracts are in excess of US90 cents a pound, price levels last seen in 2014.
Hot weather in the critical cotton producing region of Texas in the US is the major driver.
“Dryland cotton crops in the Texas panhandle region account for 12-13 per cent of the total US cotton crop,” said Commonwealth Bank commodity analyst Tobin Gorey.
“Temperatures have reached 100 fahrenheit (37.8c) in that region in the past week and it is still not officially summer,” Mr Gorey said.
“The hot weather, combined with a lack of moisture, means dryland crops are really struggling.”
“There was some rain about a week ago, but that was immediately followed by more well above average heat that meant plants did not get the chance to really use the moisture.”
And in bad news for growers in that region, Mr Gorey said weather forecasts have evolved to suggest most of the next 7‑10 days will be similar.
Along with the Texas concerns, there are worries about the south-eastern US cotton crop, in states such as Georgia, due to heavy rain from Tropical Storm Alberto.
China’s Xinjiang province also continues to experience cool weather that is hampering crop development which is also supportive of prices.
Mr Gorey said the good values on offer for two of Australia’s major summer crops were positive for Queensland and northern NSW growers, but said access to water would be the critical factor.
“The prices are one thing, having access to the water, whether through irrigation or rainfall, to take advantage of them is another thing.”
He said the competition for hectares between sorghum and cotton would be fascinating.
“I’ve written about the ‘Turf War’ starting to heat up where various commodities rise in price as end users look to shore up their supply, and this will be a classic example in the Aussie summer cropping zone, price will play a role in determining how much of each crop is planted.”
The story Cotton prices rise sees pleasant problem for summer croppers first appeared on Farm Online.