The U.S. cotton projections for the 2023/24 season indicate lower exports and higher beginning and ending stocks. The increase in beginning stocks is due to lower 2022/23 disappearance, while the reduction in exports is a result of projected reductions in world trade and U.S. market share. U.S. planted area for cotton is reported to be 169,000 acres lower this month, as indicated in the June 30 Acreage report. However, despite the decrease in planted area, harvested area is up by 117,000 acres, mainly due to above-median rainfall in West Texas. The projected U.S. cotton output remains at 16.5 million bales. As a result of these factors, ending stocks are forecasted at 3.8 million bales, which is 300,000 bales higher than the June projection. The projected price received by U.S. upland cotton producers for the current month is 76 cents per pound, 1 cent lower than the previous June estimate.
On the global scale, the 2023/24 cotton balance sheet shows higher beginning stocks, which accounts for most of the 1.7-million-bale increase in ending stocks. The beginning stocks are 1.1 million bales higher, primarily due to an estimated increase of 1.8 million bales in production for India, Brazil, and Australia for the 2022/23 season. This increase in production more than offsets a 675,000-bale increase in global consumption and a 350,000-bale decrease in Argentina's ending stocks. The decrease in Argentina's ending stocks comes after ten years of historical balance sheet revisions. The projection for world cotton production in 2023/24 is 120,000 bales higher this month due to expected larger crops in Pakistan and Afghanistan, which offset the reduced outlook for Australia and Argentina. Global consumption, on the other hand, is projected to be 550,000 bales lower, with reductions expected for China, Bangladesh, Turkey, and Vietnam, despite improved prospects for Pakistan.
The information provided in this market insight is for general informational purposes and should not be considered as financial advice. It is not intended to offer any financial recommendations or endorsements. Any decisions made based on the content are the sole responsibility of the reader.
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