MEMPHIS, TN – As a result of large carryover sales from the 2019 crop year and increased purchases from China, U.S. export commitments and shipments of cotton have been very strong for the 2020 crop year. According to Dr. Jody Campiche with the National Cotton Council (NCC), as of February 4th, total commitments reached 14.1 million bales while 7.8 million bales have been shipped and current commitments are at the highest level at this point in the marketing year since 2010. While export competition from Brazil remains strong, the United States was able to regain market share in China last year as a result of the Phase One Trade agreement. The U.S. also had higher export sales to other markets in the 2020 crop year due to lower production in Australia, Pakistan, and Turkey, though exports are projected to drop slightly to 15.4 million bales in the 2021 marketing year. At the end of the day, Campiche believes U.S. stocks could represent one of the lowest levels in the past 20 years as world production is estimated to increase by 1.5 million bales to 115.6 million due to a slight increase in acreage. Although global stocks remain high, a tighter U.S. balance sheet, low supply chain inventories, increased purchases from China, speculative money flow, weaker U.S. dollar, higher grain and oilseed prices, and post-COVID demand expectations are contributing to bullish sentiment for cotton prices.
(SOURCE: All Ag News)