U.S. cotton forecasts continue to tighten around the world

On March 7, the U.S. Fort Stone Company released a forward-looking outlook for U.S. cotton supply and demand as part of the USDA’s monthly report for March. The data presented has remained largely unchanged from previous estimates, offering a clear picture of the current cotton market dynamics. Here are the key highlights: Production: With ginning and grading operations now complete, U.S. cotton production is projected to stay at 3.98 million tons, consistent with earlier forecasts. This stability reflects steady performance across major producing regions. Domestic Consumption: According to the U.S. Census Bureau's January data, domestic cotton consumption this year is estimated at around 827,000 tons. However, the USDA has slightly adjusted its forecast upward to 806,000 tons, indicating a slight increase in usage by textile mills and other industries. Exports: U.S. cotton exports are expected to rise to 3.462 million tons this season. While there have been some instances of contract breaches, recent shipment speeds have improved significantly. Over the past six weeks, weekly shipments have consistently exceeded 87,000 tons, leading to an expectation that final export figures will surpass initial projections. Ending Stocks: With supply remaining stable and demand showing signs of growth, U.S. ending stocks are anticipated to decrease to 359,000 tons. This would bring the stock-to-use ratio down to 8.4%, marking the lowest level in nearly 50 years and signaling tight market conditions. Currently, the industry is closely watching global cotton production and spring planting activities in the Northern Hemisphere. Recent developments include a downward revision by India’s Cotton Advisory Committee, which reduced its annual cotton output forecast by 280,000 tons. Meanwhile, China’s National Cotton Market Monitoring System (NCMMS) also lowered its production estimate by approximately 10,000 tons in February. In Australia, adverse weather conditions could further reduce cotton output by 5–7%. These factors collectively suggest that global cotton supplies remain constrained. The USDA is expected to revise its global production forecast downward by 218,000 tons from the previous estimate of 25.5 million tons in the near future. Given these trends, cotton prices are likely to remain elevated throughout the remainder of the year.