Home »Cotton and Textiles » World » ICE March cotton near flat after USDA lowers world demand forecast

  • News Desk
  • Jan 13th, 2016
  • Comments Off on ICE March cotton near flat after USDA lowers world demand forecast
Cotton futures settled little changed after the US Department of Agriculture (USDA) slashed its outlook for world 2015-16 cotton production but lowered its forecast for world demand in its monthly supply and demand report on Tuesday. March cotton on ICE Futures US settled up 0.9 cent, or 0.1 percent at 61.59 cents a lb. The USDA cut its expectations for US cotton production to 12.94 million 480-lb bales, down from 13.03 million in its December forecast. The drop was within market expectations.

It slashed its outlook for world output to 101.56 million bales from 103.71 million in December, driven by large declines in Pakistan, China and India. That would be the lowest level since the 2003-04 crop year. "The world number's bullish, and the domestic number's neutral," said John Bondurant, a trader in Memphis, Tennessee, adding that concerns about the world economy driven by tumbling stock markets in China, the world's leading cotton consumer, helped keep a lid on prices.

The USDA lowered its forecast for overall world inventories at the end of the 2015-16 crop year, which ends in July, to 102.86 million bales, down from 104.39 million in its December report. It raised its outlook for US inventories slightly to 3.1 million, up from 3 million in December, while leaving its expectations for US exports unchanged at 10 million bales. The bullish impact of the declines in the USDA's forecasts for production and ending stocks was partly counteracted by a drop in its expectations for demand. It now sees US consumption at 3.6 million bales, down from 3.7 million in December, and world consumption at 110.94 million, down from 111.39 million.

Copyright Reuters, 2016


the author

Top
Close
Close