Lower Chinese cotton demand leads to higher cotton stocks

In its latest forecasts of Chinese cotton demand in both the 2014/15 and 2015/16 seasons, the USDA has downwardly revised its estimates by 1 million and 1.5 million bales respectively. 

As a result, the figures for both Chinese and global ending stocks have been raised. The inventory reduction in 2015/16 is set to total only just shy of 3 million bales. 

Given the record-high stocks of 111 million bales at the start of the season, this is unlikely to be enough to lend any noticeable buoyancy to the price, says Commerzbank.