Weighed down this year by the U.S. trade dispute with China, national cotton and grain markets experienced slight recovery in recent days.
The recovery can likely be attributed to hope the disagreement with China will be settled, according to United Ag General Manager Jimmy Roppolo.
“We’ve seen these December future contracts up around 65 cents,” Roppolo said. “It’s gotten a lot better in the last few days, maybe two, three or four cents better.”
In July 2018, China imposed additional 25 percent tariffs on U.S. cotton. The current tariffs accompanying the dispute are taking a massive toll on the U.S. commodity markets, according to County Coordinator for Ag and Natural Resources Corrie Bowen, an ag extension agent.
“If it wasn’t for the subsidies in the market facilitation program, things would be pretty grim right now,” Bowen said.
China accounts for 60 percent of global soy imports, according to the U.S. Department of Agriculture. Brazil has taken over the international market share for soy, and India is a market competitor for providing China with cotton, according to Bowen.
“That’s concerning that while the tariffs are keeping us from sending product over to China, other countries are taking our market share,” Bowen said.
The grain market is experiencing a similar upward trend as cotton, according to Roppolo. Contributing factors for the present market boost are recent cold fronts, which typically bring in needed moisture that softens the ground.
Large carry over stocks on cotton and other commodities could increase the complexity of the current market status, Bowen said.
Harvest projections for next year are expected to be decent for corn. Some members of the industry, however, feel the acres will produce less than is being predicted, according to Roppolo.
“That’s probably the driving force right now that’s pulling the market down because some of the reports and some of the yields are decent, but we still have a lot of reports that yields are a lot less than last year,” Roppolo said.
This year’s weather planning caused corn farmers to plant extremely late this year, according to Bowen, which could lead to yield and weight losses.
“We don’t know the full outcome yet of what’s going to happen in the Midwest, because the winter weather’s coming,” Bowen said. “We have an awful lot of crop that’s undeveloped.”
Two of Texas’ other large agriculture markets, feed and cattle, are experiencing lower prices than was projected for this year. Low cattle prices are driving less feed to be used.
People can’t afford to feed their cattle as much if they think they’ll lose money, Roppolo said.
The future of local and national agriculture markets are largely tied into upcoming weather and the fate of national trade.
“We’re all just waiting to see if we can work out the China deal and what effect that’s going to have on the markets,” Roppolo said.