MUMBAI(Commoditiescontrol): The USDA World Agricultural Supply Demand Estimates(WASDE) brought minor downward revision to US and India cotton production while kept other figures more or less unchanged.
Comments: WASDE was expected to make upward revision for US cotton exports amid rising export commitments however sluggish shipment pace has prompted USDA to play it safe and kept the export figure unchanged at 14.8 million bales.
Further, downward revision was expected for the Indian cotton production and upward revision in Chinese imports was expected however Indian cotton production witnessed minor cut of 0.10 million bales(480lb) to 29.30 million bales(37.5 million bales of 170kg) while China cotton import estimates declined to 5 million bales(480lb) from prior 5.3 million bales.
Indian production still seems overstated and after a survey from various traders, cotton production could fall to 35 million bales(170kg) from prior estimate at 37 million bales.
After observing no changes in US export figures and minor changes in Indian cotton production, speculators were liquidating their long build up intraday position as the ICE futures is witnessing massive reversal from intraday highs.
The benchmark March futures on ICE is trading(22:50 IST) down 2.2% to 80.82 cents/lb while has plunged 4.4% from intraday high of 84.65 cents/lb while intraday low is recorded at 80.30 cents/lb.
USDA Comments: This month’s 2017/18 U.S. cotton forecasts include slightly lower production and ending stocks. Production is reduced 177,000 bales(480lb) due to small declines in regions outside the Delta.
Ending stocks are reduced 100,000 bales, while domestic mill use and exports are unchanged. The forecast for the marketing year average price received by producers is raised 3 cents per pound, to a midpoint of 69 cents.
Offsetting changes in foreign production and consumption characterize the global 2017/18 cotton forecasts this month.
Global production is raised 1.0 million bales as a 1.4-million-bale increase for China is only partly offset by small decreases in India, the United States, and Australia.
Global consumption is raised 1.2 million bales largely due to a 1.0-million-bale increase for China. World consumption is forecast to grow at a 5.2 percent annual rate in 2017/18, more than double its long-run level.
Projected world ending stocks are changed slightly this month, down 200,000 bales from December, but at 87.8 million bales are still forecast marginally higher than the year before.
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(By Commoditiescontrol Bureau; +91-22-40015534)
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