AUSTRALIAN cotton producers are cautiously optimistic about a series of market factors that saw cotton futures last week kick to their highest levels in over seven months.
While the prices on the New York futures exchange, the benchmark for world cotton values, have since come back slightly the fundamentals that led to the rise leave the industry hopeful of strong prices for the upcoming season.
Wayne Newton, president of the grains section at AgForce in Queensland said farmers who had planted cotton were pleased with the way prices were tracking.
“It is kicking along quite well, people who have planted are happy with their decision.”
The market rise was led by strong US cotton export data, which saw futures rise by the maximum allowable of US 3 cents a pound to US82.65c/pound.
Mr Newton said in the northern cropping zone irrigated cotton plantings remained consistent but said the dryland crop was likely to be down.
“There were a couple of major reasons behind the dryland crop being smaller, firstly the season was not looking especially favourable around the cotton planting window and secondly the pricing signals at the time were not overly positive.”
Mr Newton also said a lack of stored moisture meant some growers were unwilling to take the risk on cotton without irrigation.
He said the condition of the dryland cotton, in common with other summer crops, varied from region to region.
“Some places are looking good, others could really do with a rain, but at least it has generally been cooler than last year where the heat really knocked the crop around.”