U.S. Cotton Exports Off to a Slow Start

Despite a slow start, U.S. cotton exports are on track to reach the forecast of 10.0 million bales for 2014/15. By the end of the first quarter, accumulated exports are just 12 percent of the forecast, well behind recent years.

The slow start is not unexpected. With beginning stocks at the lowest level in over 20 years, there was limited old crop cotton that could be exported. In addition, the bearish price outlook is also slowing exports, not just in the United States. Mills around the world have limited early season deliveries in expectation of lower prices later this season when new crop Northern Hemisphere cotton reaches the market.

In contrast to slow shipments, outstanding sales at the end of the first quarter equaled 50 percent of exports forecast for the season, the third highest level in 15 years. Thus, sales commitments are over 60 percent of forecast exports, well above the historical average for this time of the year, supporting the current export forecast.

Overview

For 2014/15, world ending stocks are up marginally as slightly higher production and beginning stocks are partially offset by lower consumption. Total trade is unchanged. U.S. production and ending stocks are up and exports unchanged. The forecast mid-point of the season average U.S. farm price range is unchanged at 60 cents/pound.

Prices

The A-Index and spot prices have remained stable as relatively tight stocks ahead of the availability of Northern Hemisphere new crop cotton have supported prices.

2014/15 TRADE OUTLOOK

Major Exporters:

• Australia is down 200,000 bales to 3.0 million on a smaller crop.

Major Importers:

• Burkina Faso is raised 125,000 bales to 1.125 million on a larger crop