The October 2016 World Agricultural Supply and Demand Estimates (WASDE) report has been released by USDA. Here’s the summary for cotton:
“The 2016/17 U.S. cotton supply and demand estimates show marginally lower production, larger exports, and lower ending stocks relative to last month. Production is reduced 108,000 bales, mainly in Texas. Domestic mill use is unchanged from last month, but the export forecast is raised to 12.0 million bales, due mainly to higher world import demand. Ending stocks are now projected at 4.3 million bales.
“The resulting stocks-to-use ratio of 28% is slightly below last season, but is still above the preceding six seasons. The forecast range for the marketing year average farm price is 59.0 to 69.0 cents per pound; the midpoint of 64.0 cents per pound is 1 cent above last month’s projection.
“The global cotton supply and demand forecasts for 2016/17 include sharply lower beginning and ending stocks. Beginning stocks are reduced nearly 2.0 million bales, as consumption estimates for China are raised for 2014/15 and 2015/16. The sale of more than 12 million bales from China’s recently completed reserve auctions amid rising domestic prices suggests the China mill demand was previously underestimated. Consumption is also raised for the previous two seasons in Bangladesh based on revised data. World 2016/17 production is raised for Australia, partially offset by decreases for Brazil and the United States. Consumption is raised for China and Bangladesh, but is reduced for Uzbekistan.
“An increase of approximately 1.0 million bales in world trade mainly reflects higher imports for India and Bangladesh, and higher exports for Australia, the United States, and the African Franc Zone, partially offset by lower exports for Brazil. World ending stocks are now projected at 87.3 million bales.”