USDA: Trend Analysis Of Cotton In The Near Future

From left to right: China, India, Pakistan and Turkey.

US domestic

August report slightly raised US cotton production forecast in 2010

According to the US Agriculture Ministry's first prediction based on the survey, the US cotton output in 2010 is estimated to be 18 million 500 thousand bales, up by 234000 packets from the July forecast, which is 6 million 300 thousand more than the previous year's output.

The increase in output in 2010 was due to the expansion of the planting area compared with 2009 and the increase in the national unit production.

According to the August forecast, the total area of cotton planting in 2010 was about 10 million 900 thousand acres, which is the same as that in June.

The harvest area is expected to be 10 million 600 thousand acres, an increase of 3 million 100 thousand acres over the previous year, the largest harvest area since 2006.

Therefore, the national abandonment rate is near the lowest level in history.

According to the August forecast, the US cotton abandonment rate is estimated to be only 2.5%, much lower than that of last year's 18%, which is the lowest abandonment rate after the 2.1% abandonment rate in 1947.

Meanwhile, the US yield is estimated at 837 pounds per harvest, which is 60 pounds higher than last year, the third highest yield in history, because cotton growth in most cotton growing areas is generally good this year.

Compared with the previous year, the yield of Upland Cotton in each cotton growing belt is expected to increase, but the increase is quite different (Fig. 2).

Southwest is expected to grow more than 50% of the American upland cotton this year. The local output is expected to increase by 4 million 200 thousand to 9 million 200 thousand packs.

Record the largest production area.

The growth rate of cotton is better than the average growth rate. Therefore, the abandonment rate has dropped to the lowest level in history, and the yield per unit area in this area is estimated to be second only higher than the 2008 high yield per unit area.

The abandonment area in the southwest is expected to be only 214000 acres (3.6%) this year, the same as in 2007.

In 2010, the unit yield was estimated at 769 pounds per harvest, compared to 840 pounds / acre 3 years ago.

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Production in the southeastern region is estimated to be 4 million 100 thousand packs, the highest in four years, as the area has grown to 2 million 500 thousand acres, the largest planting area since 2006.

However, the southeast region's annual production is expected to be much lower than the record of 884 pounds per harvest in 2009. This year's yield is expected to be 795 pounds per mu, similar to the 5 year average yield.

Similarly, the prediction of cotton acreage and yield showed that the planting area and output reached the highest level since 2007. The delta is expected to produce 3 million 700 thousand cotton bags and an area of about 1 million 900 thousand acres.

The yield per unit area in the delta area is also much higher than the relatively low unit yield last year, which is 956 pounds per harvest per second, after 1994, the highest yield of 1009 pounds per acre.

In the western region, the planting area of upland cotton has increased for the first time since 2004.

The expansion of planting area and the yield per unit area were higher than the average yield per unit area, making the cotton output in this area again exceed 1 million packs.

The output of super long staple cotton (ELS) is still concentrated in the western region, especially in California.

As the planting area is expanding, the latest production is expected to be 498000 packs, an increase of about 25% over the previous year, the largest in 3 years.

However, 1154 pounds / acre less than the average yield will affect further production this year, and ELS inventory will remain at a low level this year.

The growth of cotton in the early August showed that cotton grew better this year than last year.

As of August 8th, the fruit setting rate of 84% cotton fields was 73% compared to that of 2009.

Cotton growth in some States lags behind last year, but cotton growth in most States exceeds last year's growth rate and the average annual growth rate of 5 years.

In addition, some states reported that cotton had been bolting.

As of August 8th, cotton bolls and bolls of 9% cotton fields in the United States were similar to those of last year and 2005-06.

In Arizona and Louisiana, the highest rate of boll opening was 25% and 18% respectively.

Meanwhile, cotton growth in the United States in 2010 continued to exceed the average growth rate of last year and 5 years (Figure 3).

In early August, 65% of cotton fields were rated as "good" or "excellent", compared with 50% in 2009.

On the contrary, only 10% of cotton fields in 2010 were rated "poor" or "very poor", compared with 19% in 2009.

This year there is a lack of rain in some areas of cotton planting belt, but generally maintained good conditions.

Demand and inventory are corrected

In the August report, US cotton demand was adjusted based on export forecasts.

In 2010/11, US exports were expected to be increased by 700 thousand packs to 15 million packs, as foreign import demand increased and US output increased.

This year's forecast is second only to the 17 million 500 thousand package of 2005/06.

The amount of US textile mills has not been adjusted, still 3 million 400 thousand packs, but it is now forecast that the total cotton demand in 2010/11 will be 18 million 400 thousand packages, creating the largest demand record in 5 years.

As US cotton production is forecast to be slightly higher than demand, 2010/11 stocks are expected to increase slightly to 3 million 200 thousand packs at the end of the year, but still the lowest level since the mid 1990s.

According to the current forecast, the inventory to consumption ratio in 2010/11 has dropped to 17%, similar to that in 2003/04.

As a result, the prices of farm farms in the United States extend by one cent at each end, and now the forecast interval in 2010/11 is 61-75 cents / pound.

Although the 2009/10 has ended, there is still a few months left from the end of the assessment, as we have to wait for the year-end figures.

In the August report, the US export last year was downgraded according to the latest export sales report.

According to the adjustment of "export account" category, 2009/10 cotton exports amounted to 12 million bales in July, a decrease of 250000 packages compared with the forecast in July.

Due to the unadjusted use of the American textile mill, it still has 3 million 400 thousand packages. Therefore, the total demand forecast for us cotton in 2009/10 is the lowest demand in 10 years, which is 15 million 400 thousand bales.

Therefore, the estimated 2009/10 inventory at the end of the year is 3 million 100 thousand packs, the lowest level since 1995/96.

The price of US farms in 2009/10 is still 62.50 cents, the same as the final assessment report in October.

Global output rebounded sharply in 2010/11

World cotton production is expected to rebound 14% to 116 million 900 thousand packs in 2010/11, a sharp rebound on the basis of a slight decline in last year's output.

Australia, Brazil, China, the United States and Uzbekistan are the countries with larger output growth.

Australia's output in 2010/11 is expected to grow at 2 million 300 thousand packs, up 44% over the previous year, the highest in nearly 5 years.

Australia's cotton mainly relies on water conservancy irrigation. Because precipitation has greatly improved the supply of irrigation water available to the reservoir, the cotton output has increased substantially over the past few years.

Australia's cotton area is projected to grow by 30% to 260000 hectares in 2010/11, and the unit yield is estimated at 1926 kg / ha.

Australia's cotton yield is the highest yield in the world.

Brazil's 2010/11 output is expected to grow at 7 million packs, up 31% from the same period last year, representing second of the highest cotton output in history.

Like other major cotton countries, Brazil is also expanding its cotton growing area with the advantage of higher global prices.

Cotton planting area in Brazil increased by 20% to 1 million hectares in 2010/11, equivalent to the harvest area during the global economic crisis in 2008.

Mato Grosso province and Bahia Province, the largest cotton producer in Brazil, are expected to account for at least 80% of 2010/10 output.

China's output in 2010/11 is expected to be 33 million packs, up 1.5% over the same period last year.

In 2010/11, China's cotton area is expected to expand by 2% over the previous year, and the unit yield is expected to be 1331 kg / ha, close to last year's yield.

The 2010/11 output in the US is expected to increase by 52% over the previous year, because farmers respond to the high price of the cotton market and expand the cotton planting area.

The cotton planting area in the United States is estimated at 4 million 300 thousand hectares, an increase of 41% over the previous year.

Uzbekistan's cotton production in 2010/11 is expected to grow 20% from last year to 4 million 800 thousand packs due to the increase in production per unit area.

2010/11 cotton planting area in Uzbekistan is expected to be the same as that of the previous 1 million 300 thousand hectares, but the 2010/11 yield is expected to increase by 20% to 804 kg / ha.

2010/11 cotton planting area is estimated to be 33 million hectares, an increase of 9% over the same period last year, the largest planting area in nearly 4 years.

The world cotton production is expected to increase by 5% to 771 kg / ha.

World cotton trade increased sharply in 2010/11

In 2010/11, the global cotton trade is projected to be 38 million 200 thousand packs, up 7% over the previous year.

US trade growth is expected to account for the largest share of trade expansion in 2010/11. As the world's largest cotton exporter, the US expects to export 15 million bales.

Other major export countries, such as Australia and Brazil, export expectations decreased by 5% and 4.5%, respectively, to 2 million packages and 1 million 900 thousand packages in 2010/11.

India's exports are expected to be reduced by 50000 bales to 6 million 500 thousand bales compared with last year, while Uzbekistan's 2010/11 export forecast remains unchanged at 3 million 800 thousand bales.

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In 2010/11, China expects to import 12 million 500 thousand packs, an increase of 14% over the previous year, the largest import volume in 4 years.

Bangladesh's 2010/11 imports are expected to grow 4.25% from last year to 4 million 250 thousand bales, while India imports are expected to increase by 5% to 2 million 200 thousand packages.

Turkey expects to import 3 million 400 thousand packages in 2010/11, 21% less than last year, and Turkey will lag behind Bangladesh again as the third largest importer of cotton in the world.

The largest country of import growth in 2010/11 was Pakistan, and expected to import 2 million 300 thousand packs, an increase of 53% over the previous year.

World consumption rose slightly in 2010/11 {page_break}

2010/11 cotton textile mill in the world is expected to use 12 million 100 thousand bags, an increase of 27% over the previous year.

The improvement of global cotton consumption reflects the recent International Monetary Fund (IMF) July 2010 World Economic Outlook report.

According to the International Monetary Fund report, the global economy is expected to grow by 4.6% in 2010 and 4.3% in 2011.

Unlike developing countries, the economic growth prospects of developing countries are relatively high, and the developed economies will face a slow economic recovery in the coming year.

China is the largest cotton producer in the world. Cotton consumption in 2010/11 was 50 million packs, an increase of 3% over the previous year.

The amount of cotton used in textile mills in India is expected to grow by 4% to 20 million 400 thousand packages in 2010/11, while Turkey expects to spend 6 million packs, an increase of 3% over the previous year.

Brazil expects to spend 4 million 600 thousand packs, an increase of 4.5% over the previous year.

The amount of textile mill in Pakistan is expected to be 11 million 500 thousand bags in 2010/11, same as last year.

Global inventories will decrease in 2010/11

China's final inventory is expected to be 45 million 600 thousand packages in 2010/11, a decrease of 4% over the previous year, the lowest in three years.

At the same time, the expected inventory to consumption ratio is 38%, down 2 percentage points from 2009/10, the lowest ratio since 1994/95 recorded similar proportions.

Global end of the cotton inventory forecast lowered, inventory to consumption ratio down, these factors are expected to further increase the pressure on world cotton prices, 2010/11 Cotlook A index is expected to rise to the highest price in nearly 4 years.