WASDE Cotton

May 10, 2010 07:00 PM


World cotton production is projected to rise nearly 11 million bales in 2010/11, but supplies will increase less than 1 percent from last season owing to sharply lower beginning stocks. Production is expected to rise in nearly all cotton-producing countries, with the United States, India, Brazil, and Pakistan accounting for about 70 percent of the increase. World consumption is projected to rise 2.8 percent, supported by economic recovery while at the same time constrained by limited supplies. An increase in China's imports to 11.5 million bales is boosting world trade. With a slight increase in production and declining stocks, China will need to rely on imports to sustain a projected 3 percent increase in consumption. World ending stocks are projected to decline 2.6 million bales to 50.1 million. The stocks-to-consumption ratio of 42 percent is the lowest since 1994/95.

Revisions to the 2009/10 balance sheets show higher beginning stocks, higher production, and lower consumption, resulting in an increase of 1.8 million bales in world ending stocks. China accounts for most of the increase, due to higher production and imports. China's production is raised 1.0 million bales based on reported higher production for Xinjiang; imports are raised 500,000 bales reflecting activity to date. Consumption is reduced for Pakistan, Turkey, and the United States, but is raised for India and Vietnam. U.S. 2009/10 production is raised 38,000 bales consistent with NASS's final production estimate. The forecast range for the marketing-year average price received by producers is lowered 1 cent on the upper end of the range.

The 2010/11 U.S. cotton projections include higher supplies offset by higher exports relative to last season, resulting in marginally lower ending stocks. Production is projected at 16.7 million bales, which is based on the March 31 Prospective Plantings, combined with 7-percent abandonment and a yield of 815 pounds per harvested acre. Projected abandonment is reduced from the 10-year average of 11 percent due to unusually favorable soil moisture in Texas. Domestic mill use is projected at 3.3 million bales, a marginal reduction from 2009/10. Exports are projected to rise 1.5 million bales from 2009/10 to 13.5 million, as foreign demand is expected to outpace supply. Ending stocks are projected at 3.0 million bales, the lowest since 1995/96. The projected range for the marketing-year average price received by producers is 60 to 74 cents per pound.
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