A FEW WORDS FROM TOM

  Beware the ides of March are upon us! So many decisions to make. What crops do we plant? What seed varieties do we plant? What will be our fertilizer and chemical program? Is everything field ready? Is our operating line secure and sufficient? What is my total input cost going to be? What is my marketing plan going to be? Where do I reach the point of profitability? We need to answer all of these questions plus a few more!

     I look back at my marketing program for the '09 crop and I failed to read the signals the cotton market was sending. Sometimes the signals are camouflaged by other commodities such as corn, soybeans, wheat, gold, and the ever present crude oil. The market is also traded by index funds who strictly trade charts and computerized buying and selling. In other words, it makes no difference if there is 110 million or 114 million bales purchased in the world. Only to a person that trades on fundamentals is this information of extreme importance. We trade the numbers: Production minus consumption equals carryover. These numbers seemed to be in seclusion during this hard economic downturn. I look back to October when we met in Raleigh, N. C. with the Chinese Cotton Association and two of their delegates told me they would not make a 30 million bale crop and consumption would be up at all their mills. I felt for the first time they were being open and honest! I fly back down to Georgia and the USDA comes out with their supply and demand report and pegs China's crop at 32 million bales. Three months later February's supply and demand report still pegged the Chinese crop at 32 million bales. As the cash market rallied February 5th thru March 1st from .6610 to .8477. February 26th Chinese Statistical Bureau comes out with their production and consumption figures. Production was a whopping 2.7 million bales less than the USDA projection and yarn spinning was up 13% more than projected. This tells us why cash cotton moved so fast and furious. But, why did it drop from .7800 down to .6610 and a primary DTN cotton analyst project that technically cotton could trade back down to .4800? The producers holding cotton were water boarded as they came up gasping for air and as the market shot back up to 73 and 74 cents, we were happy to be sellers. Then it continued up to .8400. What could we have done differently? Come to the marketing meeting Wednesday, March 10th and we will talk about that and the great future of cotton. We look forward to seeing you and we thank you for your friendship and greatly appreciate your business!

                                                     Yours in Cotton, Tom

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