From USDA
USDA’s global forecast for the 2017/18 marketing year has seen several interesting developments since the first release in May of last year. World production is now up nearly 7 percent since May to just over 120 million bales. Production forecasts are up in most major producing countries. U.S. production now stands a little more than 10 percent higher than in May as favorable weather conditions boosted yields, especially in Texas.
China’s production is up on both higher yields and area. Production in India is up nearly 5 percent since May due to higher area; however, in the last couple of months, yield expectations have been lowered due to pest concerns which developed late in the season.
Southern Hemisphere producer-countries saw increases as well, as later-planted area expanded in response to rising prices during the season.
World consumption has risen steadily with each WASDE, and is now just over 4 percent above the May forecast. Much of this is because of China where cotton prices have not risen as fast as in the rest of the world, making domestic spinning more competitive than last year. Consumption has also trended upwards over the year in India, Vietnam, and Bangladesh.
Although the increase in consumption has been substantially less than the increase in production, the forecast for global ending stocks is nearly the same in January 2018 as in May 2017. The world ending stock forecast rose sharply from May through September largely due to steady increases in the production forecast.
However, since September, the ending stock forecast has declined nearly to the level originally forecast in May as revisions to back-years cut this year’s beginning stocks. The United States is a notable exception to this little-changed ending stock situation with ending stocks now forecast 14 percent higher than in May, the highest level in nearly a decade.
