Friday's futures markets saw rallies in the grain and oilseed pits. Much of that was driven by the large number of acres of major commodities that were lost to weather. In the case of wheat, prices were higher on that fundamental and the general bullish sentiment expressed in nearby corn and soy pits. Sometimes psychology can play an important role.
Unfortunately for producers of the nation's major fiber crop there is no nearby trading pit that can provide a psychological boost. And the fundamentals for cotton remain discouraging. That situation has an immediate impact on cotton producers, but it is likely to ripple across other commodities as cotton growers turn to other crops.
Dogged by huge stockpiles, lagging exports and weak textile demand, cotton prices have fallen to their lowest levels in 15 years ... and worldwide production of the fiber continues to grow.
Analysts for the International Cotton Advisory Council say production will increase by 6 percent over the coming year, while consumption will rise by just 1 percent. The result, the council says, is that prices will remain depressed for at least another 24 moths.
The near-term price outlook looks bleak, even though USDA predicts cotton exports in the coming year could be at their highest level since 1994. Much of the increase depends on the size of carryover stocks in countries outside of China. Analysts believe exports could rise to many cotton-producing nations that are likely to hold smaller stocks than in previous years.
USDA says that in the coming year, U.S. cotton exports could reach 1.96-million tons, nearly one-third of all world exports and well above its normal share.
Any drawing down of U.S. stocks would be welcome. At a projected 1.44-million tons, the U.S. carryover would be at its highest level since 1988.
Cotton prices might improve in the near-term with stronger oil prices, which would make man-made fibers more expensive to produce. Analysts say prices also are driven down by direct subsidies to the production and export of cotton ... and by the use of more efficient technologies in countries like Brazil, Australia and Turkey.
Another important sector of the Southland's agri-economy is also in trouble. U.S. catfish farmers are complaining Vietnamese imports are killing their market.
Producers claim as much as 1 million pounds of Vietnamese catfish are now imported each month.
Two Mississippi congressmen are calling for a country of origin labeling, arguing it is needed since the Vietnamese are packaging their catfish to imitate American brands.