With that in mind, Goodman says he’s hopeful cotton growers are taking advantage of the market’s amazing skyward movement, and selling their 2003 cotton crop. “The cotton market has made some really big moves in recent weeks, but just because cotton prices are going up doesn’t mean the market has to continue this upward trend.” Goodman says.
“Just as recently as last week we were all relatively happy with 70-cent cotton, and yesterday the December futures market hit 80 cents. This rally has caught everyone by surprise, and I just hope cotton growers are taking this opportunity to price cotton, and are selling into this rally.
“I don’t believe in putting all of your eggs into one basket, but I would sell aggressively into this market and begin thinking about marketing next year’s cotton crop.”
The New York Futures cotton price jump of the last three days was at least partly triggered by China’s recent purchase of almost 500,000 bales of cotton, said Goodman, who is based in Auburn, Ala.
“China says they’ve had a crop failure, and that seems to be what set off the market rally. In reality, no one knows the market’s future, and no one really knows what size crop China’s got. It may turn out to be all smoke and mirrors,” Goodman says.
Market fundamentals, as reported by USDA, really haven’t changed much in recent months, but these same fundamentals have pointed to the need for higher cotton prices throughout the 2003 growing season, according to Goodman.
“We’ve been waiting all year for higher prices, but by the end of August we still hadn’t broken the 60-cent mark. December futures contract fluctuated between 52 cents and just under 60 cents all year, until we began seeing movement in the market in September,” he says.
Although economists and growers alike were growing weary waiting for a market rally many industry experts believed was overdue, the fact that it came at all is welcome news to cotton growers.
“We’ve been inspecting improvement in the cotton market all year long and wondered where it was hiding, but it seems the log jam has finally broken,” Goodman says. “Most cotton growers are having a good production year with a healthy crop of cotton and a good market to sell it in. All I can say is that it’s about time.”
So how high could the cotton market go?
Looking strictly at fundamentals in the market, Goodman says, the market is already above the level justified by USDA’s crop numbers. “The market doesn’t listen to me, though, and anybody that tells you they know where the market is going is either a liar or a fool,” he says.