Bloomberg Survey: U.S. Cotton Exports Will Surge Past USDA Forecast
April 8, 2009 By Shruti Date Singh
Bloomberg
U.S. cotton exports may top a government estimate on surging sales to mills in the last three months of the marketing year, a Bloomberg News Survey showed.
The U.S., the biggest exporter of the fiber, may ship 12.33 million bales in the year ending July 31, based on the average of eight estimates in a Bloomberg News survey of analysts. Last month, the U.S. Department of Agriculture forecast exports of 12 million bales, down from 13.65 million a year earlier.
“The trend of the last three months proves USDA is too low,” said Rogers Varner, president of Varner Bros. in Cleveland, Mississippi. “Demand has been good for cotton.”
The U.S. sold the equivalent of 11.9 million bales to overseas buyers, including supplies awaiting shipment, from Aug. 1 through March 26, USDA data show. A bale weighs 480 pounds (218 kilograms).
U.S. production may reach 12.92 million bales, down from 13 million forecast by the USDA in March, according to the survey. Stockpiles on July 31 may fall to 6.94 million bales on higher exports and lower domestic production and use, analysts said. The USDA estimated inventories of 7.3 million bales last month.
Cotton futures for May delivery rose 0.05 cent, or 0.1 percent, to 47.08 cents a pound on ICE Futures U.S. in New York. The contract has fallen 4 percent this year on concern that the global recession will reduce consumption of the fiber.
World Outlook
Global production may fall to 108.3 million bales from 108.7 million forecast by the USDA last month, according to FCStone Group Inc., a commodity-risk management firm. Global consumption may slip to 110.8 million bales, down from USDA’s March estimate of 111.1 million bales, according to FCStone.
“Mill-demand forecasts have declined each of the last nine months,” Gary Raines, an FCStone economist in Nashville, Tennessee, said in an e-mailed comment. “While we are beginning to see signs of bottoming out in different countries, we expect to see further contraction in several markets in coming months.”
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