The marketing is calling for additional cotton acres, says Joe Nicosia. His message to U.S. growers: "Provide it!"
The noted Louis Dreyfuss Commodities executive vice president/global platform head of cotton encourages U.S. cotton growers to "taken another look at your cotton numbers."
Last month, the National Cotton Council had pegged cotton acres below 10 million acres for 2013.
Nicosia made the comments to a packed room at the 61st annual Mid-South Farm & Gin Show in Memphis today, March 1.
He says look to sell cotton at 85 cents to 90 cents a pound, and use a call option.
Within and without describes the current situation in cotton: What's going on with China in the market, and what's going on without China in the market.
Using its reserve to buy the majority of the cotton it grew at $1.20 per pound, China is holding its cotton, making polyester more attractive to its mills. While the world has largely recovered from a contraction in cotton consumption, the use of cotton inside China has collapsed. The problem is, as the most important consumer of cotton, "If they sneeze, the world gets the flu."
Last year, China had 118.8 million bales in its reserve. After selling off some, they'll still have almost 50 million in reserve when 2013 ends. World stocks are at 88.4 million bales.
Outside of the China numbers, "it feels tight to the world and we are starting to move up when you don't consider China. Nicosia calls the numbers where China isn't taken into account "free stocks."