NEW YORK (Reuters) - The historic rains that have hit Texas this month, causing deadly flooding in parts of the state, have delayed cotton plantings, kindling concerns about next season's crop in the top growing U.S. state.
Forecasts for further rains on Thursday have reduced the likelihood for additional plantings before the May 31 deadline for farmers to receive full crop insurance on planted cotton. This has already prompted some farmers to swap out acres for other crops like grain sorghum, traders said.
The flooding during crucial planting season dealt another blow to farmers after four years of drought, although the moisture may boost yields for the 2015/16 crop to be harvested at the end of this year.
The delays have raised further concerns about what is already expected to be a smaller U.S. crop, as low prices and massive global stockpiles prompted farmers to devote just 9.55 million acres to cotton, the lowest figure in six years.
As of May 24, cotton farmers in Texas had planted just under a third of their intended 2015/16 crop, according to the most recent U.S. Department of Agriculture (USDA) data, well below 47 percent at the same point last year and the prior five-year average of 50 percent.
The National Weather Service issued a new flash flood warning on Thursday for large parts of the state, where storms have killed at least 16 people.
May has been the wettest month in Texas history, state climatologist John Nielsen-Gammon said this week, leaving some fields too wet to plant.
"We're way behind," said Louis Rose, independent cotton trader and analyst with Risk Analytics in Memphis, Tennessee. "The yields are going to start falling."
Nearby supplies are plentiful but concerns about a potential tightening in availability later in the year have boosted the December contract's CTZ5 premium over the front-month July future CTN5 over the past week.
December, which represents the 2015/16 harvest, was 1.08 cent per lb higher than July last Friday, its highest in two months.
Farmers can still sow after the initial planting deadline, and market participants said the rains have improved soil moisture in drought-stricken portions of the state, raising the possibility of a bigger-than-expected crop from non-irrigated, or dryland, farms in Texas.
"We're real wet, but it doesn't take long to dry out," said Jobe Moss, cotton broker with MCM Inc in Lubbock, Texas.
Editing by David Gregorio