WASDE: Lower Cotton Supplies

May 11, 2011 02:37 AM
 

COTTON: The U.S. cotton projections for 2011/12 include lower supplies and offtake relative to last season, resulting in higher ending stocks. With beginning stocks sharply lower than 2010/11, production is projected at 18.0 million bales, reducing the total supply. Projected production is based on planted area from the March Prospective Plantings, combined with above-average abandonment and slightly below-average yields due to severe drought conditions in the Southwest. Domestic mill use is projected at 3.8 million bales, the same as 2010/11, while exports are reduced due to lower U.S. supplies and increased foreign production. Ending stocks are projected at 2.5 million bales, 43 percent above 2010/11, but still the second-lowest level since 1990/91. The forecast range for the average price received by producers is a record 95.0 to 115.0 cents per pound.

The initial world cotton projections for 2011/12 show a sharp increase in production to a record 124.7 million bales, with India, China, and Pakistan accounting for 70 percent of the increase. A partial easing of supply constraints, combined with projected world economic growth, is anticipated to raise consumption 3.0 million bales, above the 3 preceding years but below the peak levels of 2006/07 and 2007/08. World trade is projected at 40 million bales, mainly reflecting higher import demand by China. World ending stocks are projected to rise to nearly 48 million bales, a 13-percent increase from the beginning level; however, the stocks-to-consumption ratio of 40 percent remains relatively tight.
 
For 2010/11, U.S. production is virtually unchanged from last month, reflecting the final season estimate. Domestic mill use is raised 100,000 bales to 3.8 million, based on indications of higher-than-expected use from Farm Service Agency data. Exports are reduced 250,000 bales as the pace of export sales has fallen sharply over the past month. Ending stocks are now forecast at 1.75 million bales.
 
Estimated world production for 2010/11 is unchanged from last month, as an increase of 1.0 million bales for China is offset by a like decrease for India. World consumption is reduced, due mainly to reductions for India and Pakistan. China’s imports are lowered 1.5 million bales due to a recent fall-off in demand, which is partially offset by increased imports for Pakistan and Turkey. World ending stocks are raised nearly 1.0 million bales.

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