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

On March 7, the United States Fort Stone Company released its forward-looking forecast for U.S. cotton supply and demand as part of the USDA’s monthly report for March. The data presented in the report remains largely unchanged from previous estimates, offering a stable outlook for the sector. Here are the key details: Production: With ginning and grading activities now completed, U.S. cotton production is expected to remain at approximately 3.98 million tons. This figure reflects the final tally after all processing stages have been finalized. Consumption: Based on January data from the U.S. Census Bureau, 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, reflecting improved market conditions and potential increased usage in textile industries. Export Volume: U.S. cotton exports are projected to rise to 3.462 million tons this season. Although there has been an increase in contract breaches, recent shipment activity has picked up significantly. Over the past six weeks, weekly shipments have consistently exceeded 87,000 tons, suggesting that final export figures may surpass initial projections. Ending Stocks: With supply remaining relatively stable and demand showing slight growth, ending stocks are expected to decline to 359,000 tons. This would bring the stock-to-use ratio down to 8.4%, marking the lowest level seen in over 50 years. Currently, the industry is closely monitoring global cotton production and spring planting areas in the Northern Hemisphere. Recent developments include a reduction in India's cotton production forecast by 280,000 tons from the Indian Cotton Advisory Committee. Meanwhile, China’s National Cotton Market Monitoring System (NCMMS) also revised its forecast downward by about 10,000 tons in February. In addition, Australia’s cotton production may be affected by adverse weather conditions, potentially leading to a 5–7% decline. These factors suggest that global cotton supply remains tight. The USDA is expected to lower its global production forecast from 25.5 million tons to 25.282 million tons in the near future. As a result, cotton prices are likely to remain under upward pressure throughout the remainder of the year.