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.