Record cotton prices prove a mixed blessing

ANOTHER week of record cotton prices of around $1000/bale for current season crop has been good news for some, not so good for others.

The few growers who still have a portion of this season's cotton to sell will benefit from the windfall, but it has been a double whammy for those who suffered flood-wrecked crops and now have to wash out contracts at the high price.

In a volatile few weeks that have seen the cotton market hovering in record territory, the price hit new highs on Monday night of US$2.19/pound and closed at US$2.14/pd for May contract.

Left Field Solution's Pete Johnson, Toowoomba, said the record prices were a mixed blessing for growers.

"There will not be many people who can take advantage of that because the crop is well sold at the moment," he said.

"As well, it is hit and miss as to whether you can achieve $1000 a bale, as not every shipper has had it and there are often terms attached to it in terms of ginning period.

"Not every merchant is showing a price at the moment because the markets are so volatile."

Queensland Cotton executive general manager, marketing, Bob Dall'Alba, said few growers were likely to lock into the current price ahead of the crop being picked within the next few weeks.

"Most growers have sold a lot of their cotton. If they have anything left, they are probably being careful to ensure they are going to be able to produce it," he said.

"There will be cotton being picked in a couple of weeks so I'd say growers will wait to see what they actually have before selling it."

Mr Dall'Alba said the forward price for 2012 cotton was also reasonably strong at around $630/bale (on Tuesday), but growers were adopting a cautious approach to locking in next season's crop.

"Growers have forward sold a percentage. Based on what has happened this year, they have been fairly careful not to overcommit or sell a large portion of their crop," he said.

"At the moment they are more likely to just concentrate on getting the crop they have in the ground harvested and turned into dollars before they worry too much about selling 2012 crop."

(Source: http://qcl.farmonline.com.au/news/state/cotton/general/record-cotton-prices-prove-a-mixed-blessing/2099469.aspx?src=rss)