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Cotton Highlights from May WASDE Report

The May 2019 World Agricultural Supply and Demand Estimates (WASDE) report has been released by USDA. Here’s this month’s summary for cotton:
Led by higher production, the U.S. cotton forecasts for 2019/20 includes higher exports and ending stocks. Production is forecast at 22.0 million bales, based on 13.8 million planted acres as indicated in the NASS March Prospective Plantings report. While planted area is expected lower in 2019/20, increased precipitation to date in the Southwest suggests abandonment will fall from 2018/19’s above-average level and harvested area will rise. With harvested area up, production is projected 20% higher than in 2018/19. Domestic mill use is projected unchanged at 3.1 million bales, while exports are expected to rise 15% to 17.0 million.
At 6.4 million bales, 2019/20 ending stocks are projected 1.8 million higher than the year before, equivalent to 32% of use. This would be the highest U.S. stocks-to-use ratio since 2008/09. The marketing year price received by producers is forecast to average 65 cents per pound – 5 cents lower than in 2018/19.
For 2018/19, U.S. cotton production is reduced marginally from last month. The export forecast is reduced 250,000 bales to 14.75 million bales as the expected U.S. share of world trade declines, and endings stocks are increased about 200,000 bales.
The world 2019/20 cotton projections show a small decline in stocks and rebounding production and consumption. With global harvested area for cotton projected at its highest in 7 years and yields rebounding in major producing countries, production is expected to rise 7.0 million bales to a near-record 125.5 million. U.S. production is expected to rise the most, closely followed by India, while lower crops are foreseen for Australia and Brazil, and China’s crop is projected unchanged. World consumption is expected to rise 2.6% to 125.9 million bales, slightly above the previous consumption record realized in 2006/07.
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