The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report indicates adjustments in the U.S. and global cotton markets for the 2024/25 season, primarily due to weather-related production decreases and shifts in global demand.
U.S. cotton production decreased by over 300,000 bales to 14.2 million due to hurricane damage, leading to lower mill use and exports.
Global cotton production increased slightly, with gains in China, Brazil, and Argentina offsetting U.S. reductions, but world ending stocks decreased to 76.3 million bales.
World cotton trade lowered by over 500,000 bales, primarily due to reduced imports by China, impacting U.S. export projections.
The U.S. cotton balance sheet for 2024/25 reflects lower production, mill use, and exports compared to the previous month. The National Agricultural Statistics Service (NASS) reduced the estimate of U.S. all-cotton production by slightly over 300,000 bales to 14.2 million, mainly due to damage from Hurricane Helene. Significant reductions occurred in Georgia and North Carolina, where high winds and heavy rain affected open bolls, although some other states experienced partially offsetting gains. The national all-cotton yield estimate decreased by 18 pounds from last month to 789 pounds per harvested acre. Domestic mill use is reduced by 100,000 bales to 1.8 million due to recent mill activity data. U.S. exports are lowered by 300,000 bales to 11.5 million, reflecting weaker global import demand and reduced production. Ending stocks are raised by 100,000 bales to 4.1 million, resulting in a stocks-to-use ratio of just under 31%. The season-average upland farm price remains unchanged at 66 cents per pound.
Globally, the cotton balance sheet for 2024/25 shows a modest increase in world production by over 200,000 bales. Increases in China, Brazil, and Argentina more than offset production reductions in the United States and Spain. World ending stocks are slightly reduced from last month to 76.3 million bales. These adjustments reflect varying regional conditions and production forecasts.
World cotton trade is lowered by over 500,000 bales, mainly due to a reduction in China's imports. The decrease in global import demand impacts U.S. export projections, which are reduced by 300,000 bales. The adjustments in trade figures highlight shifting patterns in global cotton demand and supply, influenced by both economic factors and production changes.
The USDA report underscores the impact of weather events and global demand shifts on the cotton market. The reduction in U.S. production due to Hurricane Helene's damage emphasizes the vulnerability of agriculture to climatic factors. Lower domestic mill use and exports reflect weaker demand, both domestically and internationally. Global production adjustments and decreased trade volumes suggest a cautious outlook for the cotton industry in the coming season.
In light of these market developments, businesses can manage risks associated with cotton price fluctuations by utilizing Hedgify's platform to secure stable pricing and hedge against future uncertainties.
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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