(Corrects percentage change in prices in third paragraph.)
U.S. farmers will sow 11 percent fewer acres with cotton this year, less than analysts expected, as they seek higher profit from soybeans and corn, the Department of Agriculture said.
About 13.155 million acres (5.32 million hectares) will be planted, down from 14.732 million last year, the USDA said today in a report based on a survey of farmers. Analysts and traders were expecting a 12 percent decline to 12.997 million, according to a Bloomberg survey.
Cotton futures have plunged 58 percent since reaching a record $2.197 a pound on March 7, 2011, as production climbed and demand slowed. Yesterday, the contract for May delivery dropped 0.5 percent to 93.54 cents a pound.
This quarter, soybean futures surged 16 percent, the biggest gain since the end of 2010. Corn prices rose this month to the highest since September.
“Soybeans and corn typically compete with cotton when it comes to acreage,” Sterling Smith, a market analyst with Country Hedging, a broker in St. Paul, Minnesota, said in a telephone interview before the report.
The U.S. is the world’s biggest exporter of cotton and the third-largest producer after China and India.
Last year, crops in Texas, the biggest producing state, were decimated by the worst drought in at least a century.
“Hot weather in West Texas” is also deterring farmers from investing in the fiber, Michael Smith, the president of T&K Futures and Options Inc. in Port St. Lucie, Florida, said in an e-mail.
Texas may plant 6.813 million acres, down from 7.570 million last year, the USDA said. Georgia, the second-largest grower, will plant about 1.4 million acres, down from 1.6 million in 2011, according to the department.
“Corn and soybeans have to look very attractive” in the Mississippi Delta region, Jordan Lea, the chairman of Greenville, Eastern Trading Co., a Greenville, South Carolina- based exporter, said in an e-mail. Lea is a former president of the American Cotton Shippers Association.
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