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Wrapping up the 2024 cotton cropWrapping up the 2024 cotton crop

Cotton Spin: See what the December WASDE and USDA reports reflected about the 2024 cotton crop, from the year-end supply to demand and whether an old crop rally is likely.

John Robinson, Extension economist, cotton marketing

January 14, 2025

2 Min Read
Cotton Spin

Demand for U.S. cotton has appeared weak for several years. The weak demand was balanced out by short U.S. cotton crops in 2022 (drought) and 2023 (drought, too wet, and then too hot). 2024 started off promising but ended with a mix of wet/hot/dry in places around the Cotton Belt. Some folks had decent production, but most everybody was sunk by the market, which fell from the mid-80s to under 70 cents between early planting season and harvest. 

The year-end supply and demand numbers from USDA didn’t provide any fundamental solution to the old crop's low prices. On the world side, USDA’s month-over-month adjustments in the December WASDE report reflected only modest adjustments to the 2024/25 world cotton balance sheet. Beginning world stocks were cut by 430,000 bales, mostly in India (-500,000). World production was 1.21 million bales more than the previous month, mostly in India (+1.0 million), Brazil (+100,000), and the U.S. (+70,000) and slightly offset by West Africa (-100,000). World imports saw 100,000 more bales month-over-month because of Pakistan (+500,000) offsetting China (-500,000), Vietnam (100,000) offsetting Mexico (-100,000), plus a small gain in Thailand (+30,000). 

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On the demand side, world exports were raised by 80,000 bales month over month, with Brazil (-200,000) being partially offset by West Africa (-70,000) and Mexico (-50,000). World domestic use was a net 570,000 bales higher, month over month, mostly in India (500,000), Pakistan (400,000), Vietnam (100,000) and Thailand (20,000), and partially offset by China (-500,000) and Mexico (-50,000).  The supply side gains dominated those on the demand side, so the bottom line of all these adjustments was a modest 270,000 bale increase in world-ending stocks. This adjustment would be historically neutral. The monthly gains in domestic consumption might be construed as bullish if only because it’s the first time in a while to see increases. 

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The December WASDE saw minor month-over-month adjustments to the U.S. balance sheet. On the supply side, beginning stocks and imports were unchanged, as were planted and harvested acres, while yield-per-harvested-acre was raised slightly. This increase was reportedly the net effect of higher yields in the eastern Cotton Belt, offsetting lower yields on the western side. Thus, USDA raised production by 64,000 bales over last month’s production estimate. 

On the demand side, U.S. domestic use, import and export categories were unchanged over last month. The bottom line of all these adjustments, plus some minor tinkering with the “Loss” fudge factor, was a net 100,000 increase in U.S. ending stocks to 4.4 million. The monthly adjustment would historically be price neutral to slightly bearish both in the adjustment and the resulting level of U.S. ending stocks. 

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So, there you have it. As the 2024 crop begins to wrap up, there is little supply/demand rationale for much in the way of an old crop futures rally.   

For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at http://agrilife.org/cottonmarketing/.  

About the Author

John Robinson

Extension economist, cotton marketing, Texas AgriLife Extension

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