USDA’s month-over-month adjustments in the October WASDE report reflected modest tightening of the 2024/25 world cotton balance sheet. On the supply side, beginning stocks were cut by 410,000 bales, mostly in China (-500,000), and partially offset by Bangladesh (+120,000). World production was 220,000 million bales greater than the previous month, mostly in China (+400,000) and Brazil (+100,000), being partially offset by the U.S. (-310,000) and the EU (-40,000). The world imports categories saw 510,000 fewer bales compared to last month, mostly in China (-500,000, for the second month in a row).
On the demand side, world exports were reduced by 550,000 bales month-over-month, mostly in the U.S. (-300,000), Brazil (-200,000), and the EU (-30,000). World domestic use was a net 10,000 bales fewer, month-over-month, resulting from mostly offsetting adjustments in the U.S. (-100,000), Bangladesh (+100,000), and other unlisted importing countries (-10,000). The bottom line of all these adjustments was a minor 160,000-bale decrease in world ending stocks, which is historically neutral.
The October WASDE saw several month-over-month adjustments to U.S. cotton supply and demand that were probably expected. Beginning U.S. cotton stocks were unchanged, as were 2024 planted and harvested acres. Thus, the abandonment rate remains at 22%. However, yield-per-yield per harvested acre was cut from 807 in September to 789 pounds in October, reflecting expected production losses in Georgia and North Carolina from Hurricane Helene (and partially offset by yield gains elsewhere). Figure 1 shows that in most years, USDA’s October forecast of the U.S. cotton production is within 5% of the final, true number. That is to say that it is not historically unusual to see as much as a 700,000-bale swing in the production forecast at this time of year.
Figure 1. Historical Percent Deviation from Monthly U.S. Cotton Forecast to Final Estimate, By Month.
On the demand side, U.S. domestic use was trimmed by 100,000 bales, while U.S. exports were cut three million bales, month-over-month. The bottom line of these mixed adjustments was a net 100,000 increase in U.S. ending stocks, to 4.1 million. The monthly adjustment would historically be mostly price neutral in both the adjustment to and the resulting level of U.S. ending stocks.
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