Graham Soley, a USDA agricultural economist, presented his report of The world and U.S. cotton outlook for 2024/25. 

The report is divided into four parts: USDA global cotton highlights, the U.S. cotton situation in 2023/24, the world cotton outlook for 2024/25, and the U.S. cotton outlook for 2024/25.

1. USDA global cotton highlights

First, Mr. Soley highlights the key aspects of the global cotton market. He points out that global production and consumption are practically the same, with U.S. cotton production at its lowest since 1986. While global consumption is growing, consumption outside of China and India is sluggish. Furthermore, world trade has surged by nearly 7 million bales, driven mainly by China, which makes up about one-third of global imports. Global stocks and the stock-to-use ratio stays mostly unchanged, but the Cotlook A Index continues to weaken. Mr. Soley also emphasizes the impact of macroeconomic changes, cotton yarn price differences in major consuming countries, and the substitution effects of other competing fibers on the global cotton market.

2. 2023/24 U.S. cotton situation

For the 2023/24 U.S. cotton market, the report highlights several key points. Production has reached historic lows, with ending stocks at their lowest in seven years and prices nearing lows not seen since 2016. Costs of production have obviously accelerated, while domestic consumption of cotton remains historically lows. In terms of exports, China dominates U.S. cotton sales, accounting for over 40%, and there is a wide divergence in basis Brazil and the U.S. The USDA's June monthly report also revised down U.S. cotton exports by 500,000 bales, reflecting changing dynamics in supply and demand for the upcoming season.

3. 2024/25 world cotton outlook

World cotton production for 2024/25 is expected to surpass consumption, driven by increased output in the U.S. and record-high production in Brazil. Despite a rise in consumption from the previous year, it is expected to be lower than in 2020/21. Export supplies will increase significantly, but world trade is anticipated to remain stable. Thus, global stocks are forecasted to grow by 2.5 million bales, with the stocks-to-use ratio remaining mostly unchanged. The Cotlook A index is projected to decline for the third consecutive year due to pressure from rising stocks. Various macroeconomic factors and policies, such as the U.S. dollar index, interest rates, and national reserves, will also heavily influence the international cotton market in the coming period.

4. 2024/25 U.S. cotton outlook

U.S. cotton production is anticipated to rise to its highest level in three years, reaching 16 million bales, which is 4 million bales more than the previous year, indicating improved crop conditions. It is crucial to monitoring the discrepancy between March's prospective plantings report and June's acreage report. Furthermore, developments in soil moisture in Texas are expected to significantly influence future cotton growth conditions.