Cotton, grain outlook update discussed at Texas A&M tailgate event
- Writer: Blair Fannin, 979-845-2259, [email protected]
COLLEGE STATION – International influences on cotton and grain markets were featured in seminar presentations at the recent Texas A&M University department of agricultural economics tailgate event prior to the Texas A&M-UCLA football game.
The presentations were held at the AgriLife Center on the Texas A&M campus in College Station.
Dr. John Robinson, Texas A&M AgriLife Extension Service cotton economist, said cotton prices are impacted by weather and world demand, as well as financial influences such as currency and existing trade challenges.
Robinson said currently cotton demand is weak and he doesn’t expect any increase in prices in the near term.
He said that over the summer cotton prices saw a small jump from 68 cents a pound to the upper 70s due to an increase in U.S. exports, a weather market and speculative investments by large hedge funds. Since that time, prices have pulled back and neutralized in the mid 60s.
“Now that it has been raining, especially in the High Plains and Rolling Plains regions of Texas, it has had a neutral effect on prices,” he said. “A lot of the dryland cotton is finished growing there, and the rain isn’t going to have that much effect on outcome unless it continues to rain so much that it makes the seed sprout. For the irrigated acreage, some of this rain could add more pounds. We will just have to wait and see how all of this plays out.”
Dr. Mark Welch, AgriLife Extension grains marketing economist, provided an outlook on grains. He said exports could be key to any late season price gains in corn, soybeans and wheat as we are setting yield records in the U.S. on all three crops in 2016.
“With regards to exports, a strong U.S. dollar makes our exports more expensive,” Welch said. “Then you’ve got these big crops at home and abroad. That’s lots of supply to work from.”
Looking ahead to 2017, Welch said one positive is the U.S. Department of Agriculture projecting export increases in wheat due to the fact that the U.S. can produce a dependable, high-quality crop — this in the face of a strong dollar and the fourth year in row of record global wheat production.
Welch said he expects Texas grain farmers to continue to diversify their crop portfolio to offset declines in commodity prices.
“If cotton turns out to be more favorable this year and we are faced with a lower grain price outlook next year, we will probably see farmers look for opportunities to diversify,” he said. “That includes cotton, soybeans and other oilseeds such as canola, sesame and sunflower.”
Also during the tailgate seminar, agricultural economics students gave overviews of their international studies. Student presentations were given by Daniel Volleman, who presented on Australia and Fiji; Sam Alders, who presented on Mongolia; Anne Marie Wolf, who presented on France; Russell Padfield, who presented on Ghana; and James Woodruff, who presented on Scotland. In addition, Iker Huacuja, Goya Juan Pablo Dalmau and Yucheng Xie gave presentations on Swaziland.
