The 2014/15 U.S. cotton forecasts show sharply higher production and ending stocks relative to last month. Expected production is raised 1.5 million bales to 16.5 million due to larger planted area indicated in the June 30 Acreage report and lower expected abandonment based on favorable precipitation and improved crop conditions. Domestic mill use is raised 100,000 bales due to expanding domestic mill capacity, while exports are raised 500,000 bales due to the larger available supply. Despite the higher disappearance, ending stocks are raised to 5.2 million bales which, if realized, would be the largest since 2008/09. The forecast range for the marketing-year average price received by producers is 60 to 76 cents per pound, with a midpoint of 68 cents, a 5-year low.
A combination of higher estimated beginning stocks, higher production, and lower consumption raise projected 2014/15 global ending stocks by 3.0 million bales this month. World beginning stocks are raised nearly 1.6 million bales due mainly to higher estimated 2013/14 production for Brazil and lower consumption for China and Pakistan. China’s consumption is reduced 1.0 million bales for 2013/14 and 500,000 bales for 2014/15, as high domestic price levels and uncertainty about future policies have discouraged cotton use in textiles in favor of polyester. However, China’s consumption is expected to grow nearly 6 percent in 2014/15 as a result of the announced elimination of government price supports. For 2014/15, world production is raised 500,000 bales, as the forecast increase for the United States is partially offset by lower production for India, Australia, and Brazil. Aggregate world trade is about unchanged from last month, but exports are raised for the United States, Australia, and Brazil and reduced for several other exporting countries. World stocks for 2014/15 are now projected at 105.7 million bales.
Source: USDA WASDE