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Writer's pictureAvi Shaposhnik

U.S. Cotton Stocks Rise as Global Demand and Production Fall

According to the USDA WASDE report the 2024/25 U.S. cotton balance sheet shows a slight reduction in production and exports, with increased ending stocks, while the global cotton market faces lower production, consumption, and trade.


  • U.S. cotton production is revised down to 14.2 million bales, with exports lowered to 11.3 million bales, raising ending stocks to 4.3 million.

  • Global production and consumption are projected to decline, with reductions in Pakistan and Turkey impacting output and demand.

  • Global cotton ending stocks fall by 574,000 bales, driven by lower stock levels in India and Pakistan, while U.S. stocks increase.


Cotton

The U.S. cotton production forecast for 2024/25 is revised down by 10,000 bales to just under 14.2 million, with a 200,000-bale increase in Georgia’s output offset by a similar decrease in Texas. The national yield remains steady at 789 pounds per harvested acre. U.S. cotton exports are lowered by 200,000 bales to 11.3 million due to reduced global demand, which raises ending stocks by 200,000 bales to 4.3 million, resulting in a stocks-to-use ratio of 33%. The season-average upland cotton price remains at 66 cents per pound.


World cotton production for 2024/25 is lowered by 460,000 bales, driven by significant reductions in Pakistan and Turkmenistan. Global consumption is also down by 515,000 bales, with declines in Turkey and Pakistan leading the reduction. World trade is projected to fall by 295,000 bales due to decreased Turkish imports, partially offset by increases from Uzbekistan and Egypt. Global ending stocks are reduced by 574,000 bales, with significant declines in India, Turkmenistan, and Pakistan offsetting stock increases in the United States and Uzbekistan.


As U.S. cotton exports decrease and ending stocks grow, and with global production and trade contracting, cotton market participants may face supply and pricing challenges. Hedgify offers strategies to help businesses navigate these fluctuations effectively.


The information provided in this market insight is for general informational purposes and should not be considered financial advice. It is not intended to offer any financial recommendations or endorsements. Any decisions made based on the content are the sole responsibility of the reader.

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