WASDE: U.S. Cotton Stocks, Prices to Stay Unchanged

May 12, 2015 11:03 AM
 
WASDE: U.S. Cotton Stocks, Prices to Stay Unchanged

COTTON:    The U.S. cotton 2015/16 projections include marginally higher supply and disappearance compared with 2014/15, resulting in ending stocks and prices on par with the preceding year.  The increase in beginning stocks of nearly 2.0 million bales is mostly offset by an 11-percent decrease in production, due mainly to reduced planted area.  Harvested acres and yields are based on historical averages by region, with adjustments to the Southwest to reflect favorable moisture conditions.  Domestic mill use is projected higher while exports are at the prior year’s 10.7 million bales.  The marketing year average price received by producers is projected to range from 50 to 70 cents per pound, with the midpoint of 60 cents, unchanged from the current season.  

World 2015/16 cotton projections show a decline in global stocks for the first time since 2009/10.  As with the U.S. estimates, higher beginning stocks compared with last season are about offset by sharply lower world production, as most of the world’s cotton-producing countries respond to lower prices.  World consumption is raised 3.5 percent due mainly to positive world economic growth and the lagged effect of falling cotton prices during 2014/15.  World trade is reduced marginally, as a sharp drop of 1.7 million bales in China’s imports is mostly offset by increases in other countries.  China’s lower production and imports, combined with a consumption increase of nearly 3 percent, are projected to reduce ending stocks by about 3.0 million bales, accounting for more than three-fourths of the decline in world stocks.  Despite this reduction, world stocks of 106.3 million bales would still be the second highest on record.

For 2014/15, U.S. production is raised marginally, based on lower harvested area and higher yields, reflecting the season final report.  Slightly higher world ending stocks incorporate a number of current and historical data adjustments, resulting in increases for Argentina, China, and Benin, partially offset by decreases for India, Malaysia, and Brazil.

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