Cotton is on the up and up.
Higher cotton exports and lower supply are driving the price of cotton up. As a result, the USDA projected ending stocks of the fiber at 3.9 million bales, down 300,000 bales.
And suddenly, cotton is looking quite bullish.
A soundbite:
“With the weather challenges we had last year, the U.S. crop was not as large as originally expected,” says Gary Adams, CEO of National Cotton Council (NCC). “In fact, it got quite a bit smaller. And so as a result, the stocks-to-use situation, which we went into the year with a lot of stocks, we’re getting into a year with a much smaller level of stocks. So, the overall balance sheet has tightened up.”
Not to mention, cotton is seeing a good ol’ revival.
Refresher: Last year, the World Ag Outlook estimated ending stocks landing at 7.25 million bales versus the 3.9 million bale estimate for this marketing year, which ends in July.
That’s a gin-erous difference.
Zoom out: Given the expectations that COVID-19 would ravage the textile industry, cotton is in a solid spot thanks to $timmy checks and a resurgence in global consumer demand.