Cotton Price Forecast and Market Outlook
Cotton Market Fundamentals
- Supply
- The US Department of Agriculture (USDA) crop progress report for 18 June 2018 indicated US cotton planting was 96% complete compared with a 94% five-year average. Cotton conditions this season are well below last year with good-to-excellent ratings at 38% compared with 61%.
- Indian monsoon started on track though in mid-June although recently has stalled. It is projected to regain strength during the last week of June.
- Companhia Nacional de Abastecimento (CONAB), Brazilian national company for food supply, reported that harvesting in Sao Paulo has reached 70% while Bahia is starting slow. Mato Grosso cotton harvesting should be just beginning.
- Demand
- China is set to add 25% tariff to US-based cotton exports. During the current spat India is set to pick up some additional exports.
- The Chinese cotton reserve auction sold 9,200 metric tons on 20 June 2018, 31% sold. The turnover of cotton stocks has dramatically dropped since intervention to decrease no mill participation and expand Chinese imports.
- The USDA weekly export reports indicate nearly 5 million 480 lb bales of upland cotton have been contracted for export for the 2018/19 season.
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