WADE Cotton: Higher U.S. Production, Exports, Ending Stocks

This month’s 2019/20 U.S. cotton outlook includes higher beginning stocks, production, exports, and ending stocks. Production for the 2019 crop is raised 2 percent to 22.5 million bales, on NASS’s first survey-based production forecast. The survey indicates slightly higher area and yield compared with last month’s expectations, resulting in the largest crop in 14 years.

Beginning stocks are raised 250,000 bales due to lower-than-expected 2018/19 exports. Exports for 2019/20 are raised 200,000 bales this month, and ending stocks are raised 500,000 bales to 7.2 million.

The 2019/20 season-average price for upland cotton is forecast at 60 cents per pound, down 3 cents from last month.

Lower projected world cotton consumption largely accounts for a 2.0-million-bale increase in 2019/20 global ending stocks from the July forecast. Beginning stocks are higher, largely due to a 500,000-bale decline in 2018/19 consumption.

Production in 2019/20 is forecast 200,000 bales lower this month, but higher beginning stocks and a 1.2-million-bale decline in projected consumption are more than offsetting. Consumption is lower in China, India, and Uzbekistan.

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