Updated U.S. 2014/15 cotton forecasts include higher production, exports, and ending stocks compared with last month, based on the August World Agricultural Supply and Demand Estimates (WASDE) from USDA.
According to the report, beginning stocks were reduced 100,000 bales due to preliminary stocks indications for July 31, 2014. Production is raised six percent to 17.5 million bales in the first survey-based estimate of U.S. crop production, mainly on lower expected abandonment. Domestic mill use is unchanged, but exports were raised 500,000 bales to 10.7 million on stronger foreign import demand and the larger available supply.
Ending stocks are now forecast at 5.6 million bales – 39 percent of total use, the largest stocks-to-use ratio since 2007/08.
The forecast range for the marketing-year average price received by producers of 58 to 72 cents per pound was lowered on both ends, with the midpoint now forecast at 65 cents.
Revisions to the 2014/15 world cotton supply and demand balance sheet resulted in marginally lower global ending stocks compared with the July forecast. Beginning stocks were reduced 600,000 bales due to adjustments in 2013/14 for several countries.
For 2014/15, production was raised for the United States, India and Mexico, but lowered for Brazil and Australia. World consumption was raised about one percent from last month to 112.6 million bales – the highest level since 2010/11 – as falling prices are expected to boost cotton’s share of textile fiber use.
Ending stocks are now projected at 105.1 million bales, with stocks outside of China expected to grow by about four million bales from 2013/14.
The next WASDE report will be released on September 11.
Source – USDA