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The July projections for 2024/25 U.S. cotton indicate increased acreage, production, and stocks, while prices are slightly lowered. Global forecasts show higher production and consumption with reduced beginning stocks and world trade. Ending stocks in the U.S. rise significantly due to larger projected crops, while global ending stocks decrease despite higher production.

Highlights

U.S. Cotton Projections for 2024/25: The latest projections show higher acreage, production, and beginning and ending stocks compared to last month, while domestic use and exports remain unchanged.

Planted Area and Crop Projection: The U.S. planted area is reported to be 1 million acres higher according to the June Acreage report, resulting in a 1-million-bale increase in the crop projection, now estimated at 17.0 million bales.

Ending Stocks Increase: Ending stocks for 2024/25 are projected to be 5.3 million bales, an increase of 1.2 million bales from the previous month, which represents 36 percent of total use, mainly due to the larger crop.

Average Upland Farm Price: The season average upland farm price for 2024/25 is forecasted to be 68 cents per pound, a reduction of 2 cents from the June forecast.

2023/24 U.S. Cotton Revisions: The U.S. cotton balance sheet for 2023/24 shows a reduction in exports by 200,000 bales to 11.6 million, with a corresponding increase in ending stocks by 200,000 bales.

Global 2024/25 Cotton Balance Sheet: On the global front, both production and consumption are projected to increase, while beginning stocks and world trade are expected to decline.

Global Beginning Stocks: Global beginning stocks for 2024/25 are reduced by 1.7 million bales compared to June, with India contributing significantly to this reduction.

Global Production Forecast: The global production forecast for 2024/25 is raised by 1.1 million bales to 120.2 million bales, largely due to higher expected production in the United States.

Global Consumption Increase: Worldwide consumption is projected to increase by 250,000 bales, with India and Malaysia's increases offsetting reductions in other regions.

World Ending Stocks: As a result of these changes, global ending stocks for 2024/25 are reduced by 860,000 bales from June, bringing the total to 82.6 million bales.

2023/24 World Balance Sheet Revisions: The revisions to the 2023/24 world balance sheet include lower beginning stocks and higher consumption, leading to a 1.7-million-bale reduction in ending stocks.

Conclusion

The U.S. cotton industry is set for a robust 2024/25 season with increased acreage and production driving higher ending stocks, though prices are expected to decline slightly. Globally, the cotton market sees a mixed scenario with increased production and consumption but lower beginning and ending stocks. These projections highlight the dynamic nature of the cotton market and the need for strategic planning in response to changing conditions.

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