For spring planted crops like cotton, a key market influence in the fall season is the refinement of the national production forecast. U.S. cotton production forecasts are published monthly by USDA’s National Agricultural Statistics Service (NASS). For example, the current U.S. cotton production forecast is 13.13 million bales. The forecast is expressed in standard 480-pound bale equivalents (or statistical bales). Actual physical bales (or running bales) tend to weigh closer to 500 pounds, so analysts typically use conversion factors following USDA, e.g., 1.0275 statistical bales for every running bale.
Acreage and Production Data. Between May and July, NASS’s forecast of cotton production is based on surveyed planted acreage and assumed historical averages for yield and abandonment. Beginning in August, the production forecast incorporates grower survey data on acreage, yield, and abandonment. Also beginning in August, the South Texas cotton forecast incorporates data from “objective yield surveys” which involve field sampling of boll counts and weights. In September, this field sampling expands to include all of Texas, Arkansas, Georgia, and Mississippi, with repeat monthly sampling through December. Lastly, the production forecast is occasionally adjusted in the fall months based on crop insurance information (USDA Risk Management Agency) and/or certified acres data (USDA Farm Service Agency). [READ MORE]