By admin       2018-08-06

The US will apparently not realize the USDA’s export forecast of 16.2M 480 lb bales; it will likely be mid-Aug before the total of 2017 crop, plus a portion of the 2016 crop rises to 16.2M bales. The immediate effect of this will likely be a higher USDA projection of domestic ending stocks for the 2018/19 marketing year – if the current US production estimate holds, which we doubt. Otherwise, we expect that relatively light domestic demand for raw cotton, combined with an expected continuance of little to negative carry in the futures market, will result in USDA projected ending stocks (updated monthly in the WASDE report) to be effectively (and consistently) overstated.

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