Cotton prices set to hit $700 a bale

Decent yields and buoyant prices provide promise of a lucrative cotton picking season. See how the summer crop is shaping up.

Favourable yields and lucrative prices bode well for the upcoming cotton-picking season.

Prices are currently tracking at $670 a bale and could increase to $700 a bale when picking starts at the end of March.

In addition, the lower water prices have helped production costs. The value of water in the Murrumbidgee Valley has halved in the past week, with prices at $10 to $15 a megalitre for temporary allocations.

Summit Ag cotton consultant Hayden Petty from Leeton in the Murrumbidgee Irrigation Area said there was a cold start to the growing season; however, things are looking up now.

He said the crop yield potential was set, and he tipped an average of 11 bales a hectare across much of the Murrumbidgee growing region.

“We have had some really good temperatures over the past few weeks, and the fruit retention is good,” he said.

The cotton harvest is shaping up to be a good one with estimated yields of 11 bales a hectare. Picture: Supplied

Mr Petty said the daytime temperatures had averaged 30-35C and were welcome. However, anything above 36C can start to impair growth.

Night-time temperatures have been around 16-18C.

Mr Petty said the excellent yield potential would combine well with positive signs on a pricing front.

“We could potentially see prices get to $700 a bale,” he said.

Water broker Tom Wilks of Wilks Water in Wagga Wagga, NSW, said there have been some beneficial movements in the water market for irrigators.

He said the temporary water market went to 100 per cent of allocation on February 1.

That means there’s plenty of water for the finish of the season.

Mr Wilks said the forecast of El Nino conditions last year meant that many irrigators had locked in water supply and secured contracts early due to fears about dry weather.

“At the moment, water is very cheap,” he said.

In the past week alone, he said prices for temporary water allocations had dropped from around $30 to $35 a megalitre to $10 to $15 a megalitre.

Mr Wilks said the cheaper water combined with recent rain had many growers working with a full soil moisture profile.