The 2024/25 U.S. cotton outlook suggests a year of significant growth and recovery, with increased production forecasts based on favorable planting conditions and reduced abandonment rates. These domestic trends align with global shifts in cotton production and consumption, indicating an overall strengthening of the cotton market.
U.S. cotton production for 2024/25 is forecasted at 16.0 million bales, an increase driven by higher planting rates and lower abandonment.
Global cotton supplies for 2024/25 are set to increase, with a notable rise in production expected to elevate global consumption and trade.
U.S. and global market dynamics suggest a bullish outlook for cotton, with increased stocks and slightly reduced prices reflecting robust market conditions.
For the 2024/25 season, U.S. cotton production is projected to rise dramatically to 16.0 million bales, up nearly 4 million bales from the previous year. This increase stems from slightly higher planted areas, reported at 10.67 million acres, and a notable reduction in abandonment rates, which are expected to be less than half of those realized in 2023/24. Despite a lower national yield, total U.S. cotton supplies are anticipated to be 12 percent higher. U.S. exports are projected to increase by 700,000 bales, driven by these augmented supplies and a buoyant global trade environment. Domestic mill use is also expected to rise by 100,000 bales. Consequently, U.S. ending stocks for 2024/25 are forecasted to reach 3.7 million bales, marking an increase of 1.3 million bales over the low levels of 2023/24. The marketing year average upland farm price is projected at 74 cents per pound, slightly down by 2 cents from the previous year.
Globally, the cotton outlook for 2024/25 is also positive, with supplies expected to exceed the previous year. This projection is due to unchanged beginning stocks combined with a 5.4-million-bale increase in production. Global cotton consumption is projected to rise by 3 percent year-over-year, driven by increased supplies and higher demand. Significant production increases are expected in Brazil, the United States, and Turkey, which will more than offset declines in China and India. As a result, global ending stocks for 2024/25 are forecasted to increase by 2.5 million bales to 83.0 million, contributing to a resurgence in global trade and usage to a four-year high.
Reflecting on the 2023/24 season, final U.S. cotton production is estimated at 12.1 million bales. Domestic exports remained stable, while mill use saw a slight uptick. Ending stocks were adjusted downward to 2.4 million bales. Globally, production and consumption estimates for 2023/24 were revised upward, particularly noting increases in Australia’s and India’s production. However, global ending stocks were reduced by 2.6 million bales to 80.5 million due to historical revisions in Brazil and India's consumption figures.
The U.S. and global cotton markets are poised for a year of growth in 2024/25, with increased production and consumption anticipated across major producing countries. This growth scenario is expected to enhance global trade and stock levels, offering opportunities and challenges for market stakeholders.
Hedgify's financial tools can provide essential risk management solutions for stakeholders in the cotton industry, helping to navigate the complexities of increased production and fluctuating prices effectively.
The information provided in this market insight is for general informational purposes and should not be considered 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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