WASDE Cotton: Higher Domestic Production, Ending Stocks

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    This month’s 2017/18 U.S. cotton estimates include higher production and ending stocks, as a smaller crop in the West is more than offset by gains in the Southwest and other regions. While the U.S. production forecast is raised 1 percent, to 21.4 million bales, domestic mill use and exports are unchanged.

    U.S. ending stocks are now estimated 300,000 bales higher at 6.1 million bales and, at 34 percent, are forecast at their highest share of use since 2008/09. The marketing-year average price received by producers is forecast at 63 cents per pound, 3 cents above the October estimate, reflecting prices to date.

    The 2017/18, world cotton forecasts include lower beginning stocks, higher consumption, and lower ending stocks. World production is raised 596,000 bales, as larger expected crops in China and the United States offset a 200,000-bale decline in the forecast for Australia.

    But world 2017/18 ending stocks are forecast 1.5 million bales lower this month—a 1.6-percent decline—as revised historical data results in a 900,000-bale decline in estimated beginning stocks. Argentina’s 740,000-bale decline in beginning stocks is accompanied by smaller declines in the estimates for Australia and Uzbekistan.

    World 2017/18 consumption is forecast 1.2 million bales higher than last month, with increases of 300,000-550,000 bales in the forecasts for Uzbekistan, China, and Bangladesh. World trade is forecast 180,000 bales lower as a 400,000-bale decline in expected exports by Uzbekistan is only partly offset by a 100,000-bale increase for Brazil and smaller increases elsewhere.

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    This month, new government data resulted in upward revisions to consumption going back as much as 10 years in Argentina, Uzbekistan, and Bangladesh. With these historical revisions, world consumption over the past 3 years was raised more than 400,000 bales each year, so a large portion of this month’s increase in expected 2017/18 consumption reflects an upward shift in the historical data.

    Historical estimates of world trade were also reduced over the past 4 years, largely due to lower estimated Uzbek exports.

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