Cotton Highlights from July WASDE Report
The July 2018 World Agricultural Supply and Demand Estimates (WASDE) report has been released by USDA.
Here’s this month’s summary for cotton:
The U.S. 2018/19 cotton projections show lower production, exports and stocks compared with last month.
The 1.0 million bale decrease in the crop projection (from 19.5 million bales in June to 18.5 million in July) is due to higher expected abandonment, based on current conditions. Beginning stocks are 200,000 bales lower due to an increase in 2017/18 exports. 2018/19 exports are reduced 500,000 bales based on lower supplies and increased foreign competition.
With no change in domestic consumption, 2018/19 ending stocks are projected at 4.0 million bales, down 700,000 bales from the June estimate and unchanged from the revised 2017/18 level. The midpoint of the projected range of the marketing year average price is raised 5 cents from last month, to 75 cents per pound.
Historical revisions to China’s consumption back to 2014/15 account for most of a 3.3-million-bale decline in 2018/19 world beginning stocks. World 2018/19 consumption is 1.6 million bales higher than in June, as the revisions to China’s consumption estimates carry through into the 2018/19 projection year with a 1.0-million-bale increase. Consumption forecasts are also higher for Bangladesh, Pakistan, Brazil, and Vietnam.
World production is projected 290,000 bales lower than in June, as reduced U.S. and Australian production more than offsets increases for Brazil, India and Mexico. World trade is projected 165,000 bales higher this month, as lower U.S. exports are more than offset by increases by Brazil and China. Ending stocks are 5.2 million bales lower than in June, with the largest declines in China (4.6 million) and the United States. India’s and Brazil’s ending stocks are forecast higher.