Adjustments Needed: USDA’s crop progress report is forcing changes to the cotton outlook
According to the USDA’s monthly crop production report, U.S. cotton growers are set to harvest 12.57 million bales, their smallest since 2009. USDA’s latest new production forecast is also about 19 percent lower than a year ago.
USDA believes this is due to high temperatures and drought leading to a “historically high abandonment in the Southwest.” World Agricultural Outlook Board Chair Mark Jekanowski says these potential losses are causing global production and supply chain adjustments.
“Sharp reduction in harvested area, so harvested area down by about 1.3 million acres in production down 2.93 million bales. That shows up in the global balance sheet as a pretty significant reduction in global production,” said Jekanowski.
Domestic stock forecasts are down month-over-month and year-over-year, which has led to a $0.02 increase in the season-ending average price for cotton.