USDA’s April WASDE report showed a small net increase in world cotton supplies, month over month. This small adjustment resulted from a bunch of offsetting changes. First, world cotton beginning stocks were 120,000 bales higher compared to the previous month, mostly in Australia (+100,000 bales). In addition, world cotton production was 830,000 million bales greater than the March forecast, with gains in China (+1.0 million) and the EU (+70,000) outweighing month-over-month cuts in Brazil (-300,000) and Bangladesh (-10,000).   

The increase in world beginning stocks and production outweighed a 750,000-bale decrease in world imports, month over month, mostly in China (-250,000), Bangladesh (-200,000), Pakistan (-200,000), and Indonesia (-100,000), all of which more than offset greater imports by India (+50,000) and Thailand (+30,000). That is all quite a mishmash of adjustments. 

On the demand side, world domestic use was a negligible 60,000 bales higher, month over month, resulting from gains in China (+500,000), Thailand (+30,000), and the EU (+10,000) but offset by cuts in Bangladesh (-550,000), Turkey (-200,000), and Indonesia (-50,000). World exports were 740,000 bales fewer compared to March, with the major adjustments coming in Brazil (-300,000), India (-400,000), West Africa (-300,000), Australia (+200,000), the U.S. (+200,000), the EU (-10,000), and West Africa (-10,000). 

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Going strictly by the numbers, the resulting 860,000-bale increase in world-ending stocks, month-over-month, was neutral. However, it can’t be encouraging to the export-focused U.S. cotton industry to see flat consumption and reductions in trade. 

Speaking of which, the U.S. all cotton supply and demand numbers were little changed compared to March, with only a 200,000-bale increase in U.S. exports reducing U.S. ending stocks to 4.1 million. USDA is apparently kicking the production adjustment can down the road until the May WASDE. I then expect USDA to finally adjust U.S. 2022 cotton production down a couple of hundred thousand bales.   

I don’t expect that cutting U.S. old crop production will have much of a market impact in itself – it’s been expected since last Fall. 

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