Commodity Close Up: Cotton Market Update

This is a segment of Commodity Close-Up on the Kansas Farm and Ranch Radio Network. Each week, we spotlight one agriculture commodity, bringing you the latest market outlook, production trends, and the factors influencing prices.

Addison spoke with Brent Wilhelm, Green and Cotton Merchandiser for Skyland Grain, about the cotton market. They first discussed what some of the driving factors are in the market right now.

"Really right now, a lot of the drivers in the cotton market, we've actually had some

movement compared to where we were last year at this time, or really this fall.

We saw some lows in cotton. And right now, we've actually had some positive news.

You remember most of our cotton is exported over these," Wilhelm explained.

"

So you're spinning mills and stuff in, say, Pakistan, Vietnam, China. And they're actually creating some more demand for cotton right now. So we've actually seen a little bit of an upswing in our price, getting up into the area where I'd say it's probably a break even for most farmers. Or December cotton is trading around 81 to 82 cents. March is the same thing," said Wilhelm.

Wilhelm said the price of crude oil is currently helping the cotton market along with the BACA Act.

"Another thing that's helping us, not something that's formally passed yet, but we have what we call the BACA Act. So it's Buy American Cotton Act and what it does is it's, say, let's say a mill buys a million bills of American cotton and then they send back a peril that's equivalent of a million bills worth of cotton. Our government's looking into not charging them any tariffs on that cotton coming in if it's American cotton," Wilhelm said.

Wilhelm also explained how this season's weather is something that farmers should keep an eye on.

"We started out the year very dry. We were able to receive some rainfall during planning and get to crop up. But we never have really established a good deep subsoil moisture in the mix of all this. And you know, right now we're in record heat with 100 plus degree days. I think through this week it's going to be a telltale sign of really what the crop is

going to be like," Wilhelm said.