Oct 28, 2010
Brazilian Farmers Aggressively Forward Selling Cotton
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Cotton farmers in Brazil are taking advantage of record cotton prices to forward sell their anticipated 2010/11 cotton crop. Nationwide, 45% of the 2010/11 crop has been sold and in western Bahia the percentage is even higher at 60% and it could hit 80% in the next few months.
According to Conab, cotton acreage in Brazil is expected to increase 20% to 30% from 840,000 hectares planted in 2009/10 to over one million hectares planted in 2010/11. Mato Grosso is the largest cotton producing state in Brazil and the cotton acreage in Mato Grosso, both full season and safrinha, is expected to increase significantly in 2010/11, but the delayed onset of the rains may alter how the cotton in the state will be planted this year.
Last year, approximately 430,000 hectares of cotton were planted in Mato Grosso and it had been anticipated that the 2010/11 acreage could be as high as 560,000 hectares through a combination of increased full season acreage and an increase in safrinha acreage. The safrinha acreage increase may now be in jeopardy due to the delayed soybean planting in Mato Grosso.
The trend in recent years has been to plant early maturing soybeans which are harvested in January or February and then to plant a second crop of cotton. The second crop of cotton needs to be planted before the end of February in order to allow enough time for the crop to mature before the onset of the next dry season. Unfortunately, the start of soybean planted was delayed three to four weeks this year and now there may not be enough time to plant both a soybean crop and a second crop of cotton as well.
As a result, farmers may forgo planting some of their early maturing soybeans and wait until later in November or December to plant full season cotton instead. Estimates are that at least 100,000 hectares or more of soybeans may be switched in this manner.