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The latest U.S. cotton estimates for 2024/25 reveal significant reductions in acreage, production, and exports, driven by lower planting and higher abandonment rates. Global cotton production and consumption are also down, leading to a sharp decline in ending stocks and revised lower price forecasts. These adjustments reflect ongoing challenges in the global cotton market, particularly in major producing regions like the U.S. and India.

Highlights

Reduced U.S. Cotton Production: The U.S. cotton production estimate for 2024/25 is significantly reduced by 1.9 million bales to 15.1 million bales, reflecting lower acreage and increased abandonment rates.

Lowered All-Cotton Planted Area: The all-cotton planted area is revised down by about 500,000 acres, based on Farm Service Agency data, leading to a reduction in the estimated harvested area by approximately 11%.

Minimal Change in Yield Estimate: Despite the reductions in acreage, the all-cotton yield estimate is only slightly lower, at 840 pounds per acre, indicating stable productivity per acre despite challenging conditions.

Decline in U.S. Cotton Exports: U.S. cotton exports for 2024/25 are reduced by 1 million bales due to a smaller crop and declining global trade, impacting overall export projections.

Decreased Ending Stocks in the U.S.: The 2024/25 U.S. ending stocks are lowered by about 800,000 bales to 4.5 million bales, driven primarily by the reduced production, with stocks now at 32% of use.

Reduction in Season Average Farm Price: The 2024/25 season average upland farm price is adjusted downwards by 2 cents to 66 cents per pound, reflecting the reduced supply and altered market conditions.

Global Cotton Production Decline: World cotton production is projected to decline by about 2.6 million bales, largely due to reductions in the U.S. and India, impacting the global cotton supply outlook.

Lower Global Consumption Forecast: Global cotton consumption is reduced by nearly 1 million bales, mainly attributed to a decline in Chinese demand, with other regions showing minor offsetting adjustments.

Significant Reduction in Global Ending Stocks: World ending stocks for 2024/25 are reduced by 5 million bales to 77.6 million, reflecting lower production, consumption, and revised historical data, especially for China.

Revised “A” Index Price Forecast: The global cotton price proxy, the “A” Index, is reduced by 2 cents from July’s forecast, now estimated at 81.5 cents per pound, reflecting the overall weaker global cotton market.

Conclusion

The 2024/25 U.S. cotton market faces a downturn, with lower acreage, production, and exports signaling a tighter supply scenario. The reduction in global consumption, particularly in China, further exacerbates the situation, leading to decreased ending stocks worldwide. With lower price forecasts and a challenging global market outlook, the cotton industry must navigate through uncertainties in both supply and demand dynamics in the upcoming season.

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