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Industry News | Time: Mar 18 2016 8:58AM
US 2015/16 cotton crop estimated to be down 20.8%
 
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The US cotton crop for 2015/16 remains estimated at 12.9 million bales, compared with last season’s 16.3 million bales; down 20.85 per cent, however, the 2015 crop is similar to 2013.

An USDA press release informed that based on the current crop estimate and beginning stocks of 3.7 million bales, the 2015/16 cotton supply totaled about 16.7 million bales, 11 per cent below a year ago period.

“As a result of the lower supply, total demand for US cotton is also the lowest in three decades,” the US agricultural agency observed.

For 2015/16, US cotton demand is estimated at 13.1 million bales, the lowest since 1985/86 when demand totaled only 8.4 million bales.

While US mill use in 2015/16 remains estimated near the year-ago level, exports are forecast to decline considerably.

Through the first six months of 2015/16, US textile mills used 1.7 million bales of cotton, similar to the amount used during the first half of 2014/15.

In addition, mill use during the second half of the season is expected to remain similar to year-ago levels.

“However, on the other hand, US cotton exports in 2015/16 are forecast to decline more than 15 per cent,” USDA added in the press release.

“Decreased supplies, along with the lowest foreign import demand in seven year are expected to keep US exports two million bales below the 3-year average,” it noted.

“As a result, the US share of world trade is forecast to decrease from 32 per cent in 2014/15 to 27 per cent this season,” the agency explained.

US cotton export commitments through the first seven months of 2015/16 reached 7.2 million bales. Shipments, however, have only totaled 4 million bales, or 42 per cent of the export forecast.

At the comparable period during the previous marketing year, shipments had reached 44 per cent of final exports.

“With slow shipments during the first half of the season, shipments will need to average approximately 250,000 per week to make the 9.5-million-bale estimate,” USDA estimated.

With US cotton demand slightly above production this season, stocks are estimated to decline marginally and for 2015/16, US ending stocks are projected at 3.6 million bales, 3 per cent below 2014/15.

Based on the supply and demand estimates, the 2015/16 stocks-to-use ratio is projected to rise to 27.5 per cent, the highest in seven years.

Despite reduced global production, stagnant demand and uncertainties about China’s reserve stocks have pushed prices lower this season.

The average price received by US upland cotton producers is expected to decline slightly from 2014/15’s 61.3 cents per pound to range between 58 and 60 cents per pound.

Source: WTIN
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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