U.S. Cotton Demand for 2014/15 Was Revised Upward in July to 14.0 Million Bales

U.S. cotton demand for 2014/15 was revised upward in July to 14.0 million bales, nearly matching the latest 2013/14 estimate of 14.1 million bales. The export forecast was increased to 10.2 million bales as a larger available supply was forecast. Despite the increase in July, U.S. cotton exports remain projected below those of 2013/14 as world trade is forecast to decline in 2014/15.

The U.S. share of global trade is currently projected near 29 percent, up from 26 percent in 2013/14 and the highest since 2010/11. Meanwhile, U.S. cotton mill use is forecast to rise about 5.5 percent in 2014/15 as expanding domestic mill capacity is expected to push mill use to 3.8 million bales, the highest in 4 seasons.

Based on these supply and demand estimates, 2014/15 ending stocks are forecast at 5.2 million bales, 2.5 million bales above the beginning level and the highest since 2008/09 when stocks were 6.3 million bales. The stocks-to-use ratio is alsoexpected to rise considerably in 2014/15, reaching 37 percent, similar to 2008/09.

Meanwhile, the 2014/15 upland cotton farm price is expected to range between 60 and 76 cents per pound, with the midpoint of this range 9.5 cents below 2013/14’s estimate of 77.5 cents per pound.