The August 2016 World Agricultural Supply and Demand Estimates (WASDE) report has been released by USDA, and the findings continue to be bullish for cotton:
“The 2016/17 U.S. cotton supply and demand estimates include marginally higher production and ending stocks, with the farm price projected 7% above last month.
“Production is forecast at 15.9 million bales, based on NASS’s first survey of the 2016 crop. Domestic mill use and exports are unchanged from last month, raising ending stocks to 4.7 million bales – equivalent to 31% of total use.
“The marketing year average price received by producers is projected to range from 57 to 69 cents per pound. The midpoint of 63 cents per pound is raised 4 cents from last month’s estimate, based on recent price activity and tighter global cotton supplies.
“Projected world 2016/17 cotton ending stocks are down 2% this month, due to combination of lower beginning stocks and production. Beginning stocks are reduced by 1.1 million bales, due mainly to revisions in China, India and Australia. Production is reduced for China, India, Mexico and Argentina, partially offset by an increase for Brazil.
“Global consumption and imports are estimated marginally lower, mainly reflecting reductions in Vietnam and Pakistan. Exports are reduced for Brazil.
“World ending stocks are lowered 1.7 million bales to 89.6 million. Stocks outside of the United States and China are projected at 36% of total use, similar to the estimated 2015/16 ratio.”