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The U.S. cotton balance sheet for 2024/25 shows a significant reduction in production, now forecasted at 14.5 million bales, down 600,000 from August due to lower yields. This decrease has led to a cut in exports to 11.8 million bales and ending stocks reduced by 500,000 bales to 4 million. Globally, cotton production is lowered by 1.2 million bales, influenced by declines in the U.S., India, and Pakistan. World consumption is reduced by 460,000 bales, with major decreases in Vietnam, Bangladesh, and Turkey. Ending stocks globally are down 1.1 million bales to 76.5 million. The world cotton price remains steady at 81.5 cents per pound.

Key Highlights

* U.S. cotton production forecasted at 14.5 million bales, down 600,000 from August.

* Global cotton output reduced by 1.2 million bales due to smaller crops in major countries.

* U.S. cotton exports for 2024/25 cut to 11.8 million bales, a 200,000-bale reduction.

* World cotton consumption revised down by 460,000 bales, mainly in Vietnam, Bangladesh, and Turkey.

* Ending stocks for both the U.S. and global cotton balance sheets significantly reduced.

Cotton prices are expected to remain supported as U.S. production estimates for the 2024/25 season were lowered significantly. The U.S. cotton forecast for September places production at 14.5 million bales, a drop of 600,000 bales from the previous month, largely driven by reduced yields in the Southwest. This decline in output has resulted in a 200,000-bale reduction in exports, now expected at 11.8 million bales, and a cut in ending stocks by 500,000 bales to 4 million. Despite the lowered supply, the season-average upland farm price remains unchanged at 66 cents per pound.

Globally, cotton production is also facing downward pressure, with the 2024/25 forecast reduced by 1.2 million bales. Declines in the U.S., India, and Pakistan overshadow a rise in China’s output. World consumption is set to fall by 460,000 bales, with significant reductions in Vietnam, Bangladesh, and Turkey. Lower demand and reduced production are influencing global trade, leading to a 550,000-bale drop in world cotton trade estimates. Meanwhile, global ending stocks are revised down by 1.1 million bales to 76.5 million, signaling a tighter supply situation ahead.

The "A" Index, representing the global cotton price, remains stable at 81.5 cents per pound, suggesting limited movement in the short term. Revisions to previous balance sheets also reflect adjustments in beginning stocks and consumption for both the U.S. and global markets.

Finally

U.S. and global cotton supplies are tightening, but stable prices may provide market support, with lower yields and reduced consumption driving the outlook.

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