Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

World stocks cut steadies cotton market, after US yield upgraded to record high

Twitter Linkedin

The US issued a surprise upgrade to its forecast for cotton stocks, but cut its estimate for world inventories nonetheless, limiting the pressure on New York futures in the fibre.


The US Department of Agriculture, in its monthly Wasde crop report, raised by 300,000 bales to 6.10m bales its forecast for domestic cotton inventories at the close of 2017-18.


The upgrade in the stocks estimate, to a nine-year high, contrasted with investor expectations of a cut to the figure, to 5.6m bales.


And it reflected an increased estimate for production, pegged at an 11-year high of 21.38m bales, despite some ideas of crop damage from hurricanes Harvey and Irma.


“A smaller crop in the west [of the US cotton belt] is more than offset by gains in the Southwest and other regions,” the USDA said, upgrading its estimate for the average US cotton yield this year by 11 pounds per acre to a record 900 pounds per acre.


Price upgrade


Nonetheless, the USDA raised by 3 cents a pound to 60-66 cents a pound its forecast for US farmgate cotton values in 2017-18, “reflecting prices to date”, which have found support in a strong pace of orders for US exports.


Separate USDA data on Thursday showed US cotton export commitments – that is, sales and completed shipments combined – at 8.91m bales for this season, up 36% year on year.


And at a global level, the USDA cut its forecast for inventories by 1.50m bales to 90.9m bales, a far bigger cut than expected by investors, who had pencilled in a 91.6m-bale figure, according to a market poll.


Demand upgrades


The extent of the downgrade to the world stocks figure reflected in part historical revisions for estimates for stocks in the likes of Argentina and Uzbekistan, but also increased consumption estimates for this season.


“World 2017-18 consumption is forecast 1.2m bales higher than last month, with increases of 300,000-550,000 bales in the forecasts for Uzbekistan, China, and Bangladesh,” the USDA said.


“Higher global production in several major producers is more than offset by higher use.”


Cotton futures for December stood 0.5% lower at 68.29 cents a pound in late deals in New York.

Twitter Linkedin
Related Stories

Hedge funds turn net bullish on ags - ahead of price drop to historic low

Speculators are wrong-footed in soymeal, in which they hike bullish bets just before a price tumble. But they fare better in cotton and cocoa

US officials stoke speculation of boost to Chinese cotton imports

The need for high-grade cotton could see China issue extra import quota, with US supplies likely to benefit from extra orders

Evening markets: Brazilian travails send coffee, soybean and sugar futures lower

... while Canada’s crop upgrade sends wheat to a fresh contract low. But cotton spares blushes for ag bull, hitting a seven-month high

Evening markets: Soybean futures reverse - despite soymeal resilience

Soybean futures lose bouyancy, although fare better than wheat, which sets fresh contract lows. Sugar tumbles even faster
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069