24/25 Global easing pattern has been determined:
Since the middle of 2024, the market has begun to trade the expectation of the global cotton production increase in 24/25 and the inventory accumulation at the end of the period. Although both production and demand are expected to increase, the output growth is higher than consumption. According to the USDA's December supply and demand report, the global output in 24/25 is expected to be 25.558 million tons, with a year-on-year increase of 960000 tons, 1.98% higher than the five-year average. This is mainly due to the recovery of production in the United States and the increase of Brazil's planting area. In addition, China and Turkey also showed a certain increase in production, However, India and Pakistan suffered from different degrees of decline in output due to continued heavy rainfall.
USDA estimates that the cotton consumption will increase by 319600 tons to 25211000 tons compared with the previous year, and the final inventory at the end of the period is expected to accumulate 400000 tons to 16550000 tons. In the 24/25 year, the cotton price will be under pressure. However, up to now, the market has been trading on the expectation of supply and demand easing for a long time. In terms of output, In the process of cotton growth in the ICE period, the cotton has repeatedly traded the excellent rate of American cotton, extreme weather, Brazil, India and other national variables, and the sensitivity of the market to output has been relatively limited. With the new flower processing and listing, the market focus has gradually shifted to the demand side, and it is necessary to pay attention to Trump's foreign trade attitude and policy formulation after taking office.
The United States: mainly for recovery production increase:
In 2024, the market continued to revise its expectation on the yield increase of American cotton. With the aggravation of drought in some major production areas in the second half of the year and the impact of subsequent hurricanes, the excellent rate of American cotton declined, which ultimately led to its yield growth not as initially expected, and the cotton in ICE also rebounded.
According to the USDA's December supply and demand report, the annual output of American cotton in 24/25 is estimated to be 3.1037 million tons, compared with the first production forecast of 3.4836 million tons in May, the output of new crops was revised down to 380000 tons, but the recovery increase was 476700 tons year-on-year. In terms of consumption, American cotton is mainly exported. USDA estimates that the export of American cotton will be 2.4603 million tons in 24/25, a year-on-year decrease of 90000 tons. Under the background of production increase and demand decrease, the ending inventory is expected to accumulate 272000 tons to 958000 tons.
At present, with the end of American cotton harvest and the inspection in full swing, the market's trading weight for consumption has increased. According to the USDA weekly sales report, the contracted volume of American cotton has increased in recent weeks, but the annual total contracted volume still maintains its position over the years. By the week of December 12, 2024, 44200 tons of American upland cotton had been signed weekly in 2024/25, an increase of 27% on a weekly basis and 33% on a year-on-year basis.
In 2024/25, 29200 tons of American cotton were shipped weekly, a decrease of 6% on a weekly basis and 42% on a year-on-year basis. 2024/25 The total signed sales volume of American cotton upland cotton and Pima cotton is 1.688 million tons, accounting for 69% of the annual forecast total export volume (2.46 million tons); The cumulative export shipment volume was 579200 tons, accounting for 34% of the total annual contracted volume, lower than the same period in previous years.
In 2025, the planting area of American cotton still needs to pay attention to the price comparison between cotton and grain at the end of the first quarter. Although American cotton has dropped to a lower level, soybeans and corn, as competitive crops, have also fallen a lot. As far as the current price comparison is concerned, the cotton price is fair, and needs to be tracked continuously.
Brazil: output reaches a new high:
In 2024, Brazil's output will reach a new high against the background of double growth of cotton planting area and unit yield. According to the USDA's December report, Brazil's output in 24/25 is expected to increase by 15.3% year-on-year to 3.658 million tons, 876000 tons more than the average in the previous five years. According to CONAB, it is expected to increase by 14.2% year-on-year, 739000 tons more than the average in the previous five years. Although there is a small difference between the two, there is no doubt about the pattern of large yield.
With the production breakthrough, Brazil's domestic consumption does not show a significant increase, and its export volume is bound to increase. In addition, Brazil's exchange rate has depreciated seriously this year, and the dollar/real exchange rate has increased by more than 20% accumulatively this year. Brazilian cotton seems to be more cost-effective than American cotton, further strengthening the competitiveness of the export side.
According to USDA, Brazil's export volume in 24/25 is expected to reach 2.7216 million tons, 260000 tons more than that of the United States.
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Post time: 2025-01-03 17:03