USDA Reports Smaller Cotton Crop, Decreased Wheat Supply

WASHINGTON, DC – Domestic cotton production is 3 percent less than previously thought, according to the latest World Agricultural Supply and Demand Estimates (WASDE) from USDA. All cotton production is forecast at 20.2 million 480-pound bales, down 3 percent from the previous forecast but up 10 percent from 2018. Based on conditions as of December 1, yields are expected to average 775 pounds per harvested acre, down 24 pounds from the previous forecast and down 89 pounds from 2018. Upland cotton production is forecast at 19.5 million 480-pound bales, down 3 percent from the previous forecast but up 11 percent from 2018. Production is lowered 611,000 bales mainly due to a 500,000-bale decline in Texas. Domestic mill use and exports are unchanged. Ending stocks are 600,000 bales lower this month, at 5.5 million. Upland cotton’s season-average farm price is also unchanged at 61 cents per pound. The outlook for U.S. wheat is for decreased supplies, higher exports, and lower ending stocks. Wheat imports are lowered 15 million bushels to 105 million on a slower than expected pace to date; Hard Red Spring (HRS) is down 5 million bushels and Durum is lowered 10 million. If realized, these would be the lowest imports in nine years. U.S. wheat exports are raised 25 million bushels to 975 million on a strong pace to date, more competitive prices, and reduced supplies from several major competitors. Hard Red Winter and Durum exports are each raised 10 million bushels, and HRS is raised 5 million. With reduced supplies and higher use, 2019/20 ending stocks are cut 40 million bushels to 974 million, the lowest in 5 years. Despite the tightening stocks, the season-average farm price is lowered $0.05 per bushel to $4.55 based on NASS prices to date and expectations of cash and futures prices for the remainder of the market year. This month’s corn supply and use outlook are unchanged from last month. The projected season-average farm price is unchanged at $3.85 per bushel. Soybean supply and use projections for 2019/20 are unchanged from last month. The U.S. season-average soybean price for 2019/20 is forecast at $8.85 per bushel, down 15 cents.