USDA Raises July Cotton Forecast for U.S. and China
The U.S. Department of Agriculture (USDA) has adjusted its cotton production outlook upward in the July report, citing both domestic improvements and favorable conditions abroad. The update was shared by Mark Jekanowski, Chair of the USDA’s World Agricultural Outlook Board, in a report via Southeast AgNet.
U.S. Cotton Output Grows by 600,000 Bales
For the United States, cotton production was increased by 600,000 bales in July. This rise was paired with a 300,000 bale reduction in beginning stocks. No additional changes were made to the U.S. balance sheet. Instead, the adjustment resulted in a 300,000 bale increase in projected ending stocks.
“This month we raised production by 600,000 bales for the U.S., and with the reduction in beginning stocks, that shift simply moved into ending stocks,” Jekanowski explained.
China Cotton Forecast Raised to 31 Million Bales
The USDA also raised China’s cotton production forecast by 1 million bales, bringing the total estimate to 31 million bales for the 2024-2025 marketing year. Despite the increase, the figure remains 1 million bales below last year’s total.
The revision is largely attributed to consistent, favorable weather across China’s primary cotton-growing region, Xinjiang.
“Our logic for raising our production forecast this month is that China has been having remarkably good weather since planting,” said Jekanowski. “It’s on par with last year, and last year’s crop turned out to be much bigger than expected.”
Optimism for Another Strong Chinese Crop
Xinjiang, which produces the vast majority of China’s cotton, is experiencing weather conditions similar to the previous season. Last year’s cotton crop in the region exceeded expectations due to these favorable conditions, prompting USDA analysts to take a more optimistic view of the current season.
“We kind of chased that crop higher throughout the production season,” Jekanowski added. “Given that the conditions this year are following a similar path, we’re increasingly optimistic that they are going to have another very big cotton crop.”
Conclusion
The USDA’s July cotton outlook signals strength for both U.S. and Chinese production in the coming season. With strong weather trends in China and improved production estimates domestically, global cotton markets may see increased supply pressures in the months ahead.
Reporting by Dale Sandlin, Southeast AgNet.