USDA Sees Higher New Crop Cotton, Ending Stocks

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The USDA expects a bigger carryout for US cotton and rice in the coming marketing year.

New crop cotton ending stocks are seen at 7.7 million bales, with a big jump in old crop ending stocks, or new crop carryover, cancelling out a slightly smaller crop and expected better demand, pressuring the new crop price outlook. 2019 upland US cotton ginnings were 18.7 million bales, 1.6 million above in 2018, but more than a million below 2017.

The USDA also expects bigger new crop world ending stocks for cotton and rice, with record global rice production. The new marketing year for cotton and rice starts August 1st. The USDA’s next set of supply, demand, and production estimates is out June 11th.

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2019/20 US cotton ending stocks are pegged at 7.1 million bales, compared to 6.7 million last month and 4.85 million last marketing year. With production up slightly at 19.91 million bales, a higher average yield figured cancelled out a lower harvested area number, the total supply is seen at 24.77 million bales.

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Domestic use was slightly lower at 2.7 million bales, leaving total use at 17.7 million, and the “unaccounted” category went from 600,000 bales to -300,000. The average 2019/20 farm price is estimated at $.59 per bale, unchanged from April and down from the 2018/19 average of $.703.

2020/21 US cotton ending stocks are expected to be 7.7 million bales. Production is projected at 19.5 million bales, with a total supply of 26.61 million, while domestic use projected at 2.9 million bales and exports pegged at 16 million bales, leaving total use at 18.9 million bales.

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The average 2020/21 farm price is estimated at $.57 per pound.

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