USDA Cotton Supply And Demand Report

The global cotton output in 24/25 increased by 449000 tons compared with the previous month, including 6532000 tons of 392000 tons in China, 87000 tons in Australia and 34000 tons in the United States; Previously, American Agriculture had a low estimate of China's cotton output. At present, the domestic estimate of China's cotton output is 6.7 million to 6.8 million tons. The global cotton supply is relatively sufficient. In addition to the uncertainty brought by Trump's inauguration, the medium-term price is faced with greater uncertainty.

In 24/25, the global consumption slightly increased by 22000 tons, of which the consumption in Bangladesh and Vietnam both increased by 22000 tons, and the consumption in Turkey decreased by 22000 tons. The overall adjustment of global consumption was small. In the first half of the year, the focus was on the impact of the "Trump deal" on consumption.

The global cotton import increased by 44000 tons in 24/25, of which China's import decreased by 109000 tons, and China's import continued to decline. On the one hand, China's import demand continued to be weak, and China's high yield also limited the overall import volume; Pakistan and India both increased their imports by 65000 tons, while the adjustment of other major importing countries was relatively small.

The global cotton export increased by 49000 tons in 24/25, the Brazilian export increased by 2787000 tons to 65000 tons, and the American cotton export decreased by 239500 tons to 65000 tons. The adjustment of other major exporting countries is relatively small. China's purchase demand for Brazilian cotton is significantly better than that of American cotton.

The global 24/25 ending inventory increased by 412000 tons, including 278000 tons for China, 87000 tons for the United States, 69000 tons for Australia, 43000 tons for India, and 65000 tons for Brazil. It can be seen that the inventory of major producing countries has been raised. The global cotton consumption in 24/25 is generally OK, but the supply increase is larger. Brazil is expected to continue to produce high yield in the new year, and the uncertainty brought by the "Trump deal" in the first half of the year is large.

To sum up, the January report of the U.S. Department of Agriculture was empty, and the price of American cotton fell sharply after the report was released. The market had some expectations for the increase of Chinese production, and the demand performance was still average; The peak season of gold, silver and silver in the first half of China supported prices, but faced with the pressure of sufficient supply, the implementation of domestic macro policies, and the disturbance of Sino US relations, prices faced more uncertainty.