U.S. 2017-18 production forecast at 19.2 million bales, largest since 2007-08, with ending stocks rising to 5 million bales. World stocks projected to decline 1.39 million bales to 87.14 million, 75% of mill use.

Cotton futures fell to a sharp loss Wednesday as traders digested USDA supply-demand forecasts featuring a larger-than-expected U.S. 2017-18 crop and a rise of 1.8 million bales in ending stocks.

July settled down 94 points to 76.49 cents, its lowest close since April 12 and near the low of the sessionΆs 121-point range from up 14 points at 77.57 to down 107 points at 76.36 cents. It touched the high in the opening minutes overnight and ticked last at 76.39 cents.

December lost 71 points to settle at 72.33 cents, just off the low of its 86-point range from 73.12 to 72.26 cents and below the previous three weekly lows.

Volume quickened to an estimated 36,096 lots from 26,289 lots the prior session when spreads accounted for 13,378 lots or 51% and EFS 140 lots. Options volume slipped to 7,030 lots (3,674 calls and 3,356 puts) from 7,570 lots (3,092 calls and 4,478 puts).

A projected 2017-18 U.S. crop of 19.2 million bales is expected to sharply increase next seasonΆs carryover, USDA reported, while world forecasts showed an ending stocks decline of 2.4 million bales with consumption exceeding production for the third consecutive year.

Production is anticipated to rise 12% from 2016-17 to the largest since 2007-08, based on 12.23 million planted acres as indicated in the March intentions combined with below average abandonment of 850,000 acres or 6.95% owing to relatively favorable moisture and average yields.

A projected yield of 810 pounds per harvested acre, down from 867 pounds in 2016-17 but up from 766 pounds in 2015-16, is based on five-year average yields by region. The projected harvested area is based on the 10-year average abandonment by region, with the Southwest adjusted 10% to reflect favorable moisture conditions.

Exports are projected to decline to 14 million bales, still the second largest behind this season since 2010-11 and the third largest since 2005-06. Domestic mill use is forecast up 100,000 bales from this season to 3.4 million.

Ending stocks are estimated at 5 million bales, largest since 2008-09 and 28.7% of total market offtake. AnalystsΆ pre-report carryout estimates had averaged 4.6 million bales.

The preliminary range for the 2017-18 average price received by producers is projected all the way from 54 to 74 cents per pound, compared with 69 cents now foreseen for 2016-17 and 61.20 cents in 2015-16.

For 2016-17, the U.S. export forecast jumped 500,000 bales from the April estimate to 14.5 million, reflecting higher-than-expected sales thus far, with ending stocks down a corresponding amount to 3.2 million bales. The projected stocks-to-use ratio of 18% is down 30.2% last season.

Final 2016-17 production dipped a marginal 60,000 bales to 17.17 million, with the Texas crop up 300,000 bales from the January estimate to 8.1 million.

Globally, production is expected to rise nearly 7% to 113.22 million bales, despite marginally lower average yields, with the cotton area rebounding to the largest in three years. Consumption is expected to rise 2.3% to 115.75 million bales amid a growing world economy.

This would mean a production shortfall of 2.53 million bales, compared with an upwardly revised 7.32 million in 2016-17.

Projected world trade is up slightly from 2016-17 to 37.63 million bales as import-oriented consumers such as Vietnam and Bangladesh are expected to account for a larger share of global mill use.

Ending stocks are forecast to decline to 87.14 million bales, 75.3% of world consumption, down from 79.1% now estimated for 2016-17 and the lowest global stocks-to-use ratio in six years.

Falling China stocks exceed the projected global decline, while stocks outside China are expected to rise for a second year. Despite a projected decline of 9.05 million bales from 2016-17 to 39.65 million in ChinaΆs carryover, ChinaΆs ending stocks are estimated at 105.7% of its domestic mill use.

For 2016-17, world production declined marginally from last month, consumption rose slightly and ending stocks fell 1.39 million bales to 89.52 million.

Futures open interest declined for a third session Tuesday, dropping 1,594 lots to 257,824, with JulyΆs down 1,473 lots to 135,415, Decembers down 379 lots to 105,809 and MarchΆs up 31 lots to 10,952.

Certified stocks declined 7,721 bales to 310,933. There were 2,479 newly certified bales and 10,200 bales decertified. Awaiting review were 616 bales at Memphis.