US cotton: supply outweighs demand
US cotton futures fell the most in almost three weeks after the government raised its crop forecast, Bloomberg has reported.
Farmers will produce 16.6 million bales of cotton in the harvest that began in August 2011, 0.3% more than projected in September, the US Department of Agriculture has said in a report.
Output gains in California, Mississippi and Georgia are making up for losses in Texas, where crops were damaged by the worst drought in more than 100 years.
“There’s more supply and less demand,” Keith Brown, the president of Keith Brown & Co., a broker in Moultrie, Georgia, told Bloomberg. “Global inflation is affecting foodstuffs, and people will go to that before they go to cotton.”
US exports will total 11.5 million bales, down 4.2% from last month’s forecast of 12 million bales and 20% lower than shipments in the previous year, the USDA said. Each bale weighs 218 kilograms.
