USDA Adjusts Lower 2024/25 Balance Sheet Further

USDA has adjusted lower the 2024/25 balance sheet for the fourth consecutive month as of November. As previously mentioned, the primary reason for the decline in inventory is the USDA's proactive adjustment of Indian cotton production, leading to a global production decrease. Specifically, the 2024/25 balance sheet has reduced production by 100,000 tons to 25.3 million tons, lowered the beginning stocks by 130,000 tons to 16.24 million tons, and decreased the ending stocks by 130,000 tons to 16.49 million tons. Additionally, the USDA has lowered import volumes by 70,000 tons, consumption by 110,000 tons, and export volumes by 60,000 tons.

In this production adjustment, the U.S., Brazil and China did not contribute to the reduction figures. Among the major producing countries, only the production of Pakistan reduced by 40,000 tons, while the total production cut of 100,000 tons seems somewhat insufficiently justified. Overall, the USDA's November balance sheet provides relatively clear support for ICE cotton futures market. Moving forward, attention should be paid to whether stocks and production will be further adjusted downward.