Cotton to end with 6-bn bale dip

According to the USDA first 2017/18 cotton projections at the Agricultural Outlook Forum, it was disclosed that there will be a 6-million-bale decline in global ending stocks.  However, all of the decline is expected to occur in China, as consumption continues to significantly exceed production while imports remain restricted, eliminating much of existing stockpiles

Outside of China, forecasts for growth in use are more moderate, at just about 1 per cent growth, while production is expected to rise for another year. Greater production in 2017/18 will largely be driven by higher area, while global yield is likely to decline slightly. Area increases will result from favourable cotton prices around Northern Hemisphere planting times.

US cotton exports are projected to remain at their current elevated level of 13.2 million bales in 2017/18, due to expectations of large US exportable supplies. Ending stocks are projected to rise slightly for a fourth year in a row, while the US share of trade is expected to be high for a second year in a row. Greater supplies outside of China are expected to pressure cotton prices in 2017/18. Hence, the price received by US farmers could fall within the range of US 60-70 cents per pound, compared with the current 2016/17 forecast of US 68.5 cents.

For 2016/17, global production is raised, while use is essentially unchanged, resulting in higher global ending stocks.  Global trade is raised.  US production is raised, partially offsetting higher US exports.