USDA’s Economic Research Service (ERS) is forecasting a decline in global ending stocks of cotton in 2015/16 – a 9% slip from last year’s record that nearly topped 112 million bales. The marketing year runs August to July.
Cotton prices have been rising steadily since the 2010/11 marketing year because relatively high prices were encouraging production and discouraging consumption.
ERS attributes this recent build-up of global stocks to Chinese policies that protected its growers from declining world prices. But recent policy shifts there intend to reduce government-held stocks China’s share of global stocks is more than 60%.
U.S. cotton acres are expected to be 11% more than were planted in 2015. Upland acres are projected at 9.35 million acres this year.
Cotton futures were up after trading on May 2 – the markets closed at 64.36 ( 0.60) for May ’16 and 64.71 ( 1.25) for Dec. 16.
Click here for the entire ERS April 2016 Cotton and Wool Outlook.