COTTON: This month’s 2011/12 U.S. cotton supply and demand estimates include offsetting revisions which leave ending stocks unchanged from last month. Beginning stocks are raised 500,000 bales, reflecting lower estimated exports for 2010/11. Production is reduced 1.0 million bales to 17.0 million, due mainly to expected higher abandonment resulting from the increased severity of the drought in the Southwest. With lower available U.S. supplies and marginally lower world imports, exports are reduced 500,000 bales to 13.0 million. The stocks-to-use ratio of 15 percent is above 2010/11, but remains the second lowest since 1995/96. The projected range for the marketing year average price received by producers is unchanged from last month at 95 to 115 cents per pound.
Changes to the 2011/12 world projections primarily reflect higher beginning stocks, lower production in the U.S. and lower consumption by China. In addition to the substantial decrease in the U.S. crop, production is reduced in Uzbekistan, but is raised in Mexico and Turkey. Forecast consumption by China is reduced 500,000 bales, as the recent slow pace of imports indicates sluggish demand now and early in the new marketing year. Similar to the U.S., China’s projected stocks-to-use ratio, if realized, would be the second smallest in 22 years. Imports are reduced for Hong Kong, Mexico, Pakistan, and others, while exports are reduced for the U.S. and Uzbekistan, but raised for Australia and Brazil. World ending stocks are raised marginally.
This month’s most significant changes to the 2010/11 estimates are lower trade—especially lower imports by China and lower exports by the U.S.—and lower estimated consumption by China and India. The estimated range for the U.S. marketing-year average price received by producers of 81 to 83 cents per pound is lowered one cent on the upper end of the range.