December Cotton was lower overnight on follow-through from Friday’s bearish reaction to the USDA report and disappointment over from the lack of detail on China’s fiscal stimulus plans. The Chinese finance minister held a press conference over the weekend but gave no indication of the amount of stimulus. China has been one of the largest buyers of US cotton in recent years, but their strong crop this year coupled with their sluggish economy has lowered US export prospects. The USDA report was bearish against expectations, with US exports lowered more than production, pulling ending stocks higher instead of slightly lower as expected. World production was revised higher due to increases for China and Brazil, but world ending stocks still declined. US cotton areas are expected to see mostly dry conditions this week, favoring crop maturation and some harvesting.

The USDA report put US 2024/25 cotton production at 14.20 million bales, down from 14.51 million last month and slightly below the average expectation of 14.27 million. Average yield was lowered to 789 pounds/acre from 807 last month in the wake of damage from Hurricane Helene. US exports were lowered to 11.50 million bales from 11.80 million last month and below average expectations of 11.65 million. US ending stocks were increased to 4.10 million bales from 4.00 million last month versus 3.98 million expected. This puts the US stocks/use ratio at 30.8%, up from 29.2% last month but down from 32.4% in the August report. This is up from 23.2% last year. World production was revised higher to 116.64 million bales from 116.42 million last month versus expectations for a decline to 116.16 million, and world ending stocks were reduced to 76.33 million bales from 76.49 million last month and 76.34 million expected. China’s production was revised to 28.20 million bales from 27.80 million last month, and their imports were lowered to 9 million from 9.5 million last month. Brazil’s output was revised up to 28.20 million from 27.80 million last month.