US cotton crop slightly higher in October, 2012

20 Oct '12

4 min read

Foreign stocks jumped dramatically last season and begin this season at a record 66.2 million bales; however, over 45 percent of the total is estimated to be held by China, where national reserve policies account for the buildup. Meanwhile, forecast imports by China are down by more than 50 percent, which will reduce world trade this season. The U.S. share of world trade is forecast at 32 percent, above last season but below the 5-year average of about 36 percent.

As a result of the latest supply and demand estimates, U.S. ending stocks were revised upward in October to 5.6 million bales, two-thirds more than the final 2011/12 ending stock estimate. The stocks-to-use ratio is forecast at 37 percent compared with last season’s 22 percent. Both the stock level and the ratio are at their highest in 4 years.

2012/13 Farm Price Range Narrowed; 2011/12 Price Finalized

Based on the most recent prices and the latest supply and demand estimates, the average upland cotton farm price is now forecast to range between 62 cents and 74 cents per pound. The midpoint of 68 cents would represent a considerable decrease from last season’s final estimate of 88.3 cents per pound released by USDA in October. The 2011/12 price was nearly 7 cents higher than the average price recorded for 2010/11. The lower price expectations for 2012/13 contributed to reduced cotton area and will play a key role in acreage decisions for 2013.

U.S. Department of Agriculture (USDA)

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