USDA has lowered estimated U.S. cotton production by 1 million bales from last month due to record abandonment anticipated in Texas and knocked an equal amount off its export forecast because of weakening demand.

The July 12 Crop Production report and World Agricultural Supply and Demand Estimates also raised forecast corn production, while lowering estimates for rice and soybeans.

Cotton

U.S. cotton production was reduced 1 million bales from last month, to 16 million bales, due primarily to historic drought conditions in Texas, where as much as 30 percent of the crop is expected to be abandoned.

Beginning stocks were raised 500,000 bales due to continued export sales cancellations and the slow pace of shipments in the final months of 2010-11.

Projected exports were lowered 1 million bales to 12 million, due both to reduced U.S. supplies and weaker foreign demand. Ending stocks were raised to 3 million bales, but the forecast stocks-to-use ratio of 19 percent is still relatively tight. The average price received by producers is now projected at 90 cents to $1.10 per pound.

World cotton consumption was lowered nearly 2 percent from last month, as surplus yarn stocks and substitution of polyester for cotton in textile products are expected to reduce demand below previous expectations.

Imports were reduced for several countries as a result of weaker demand growth, with China accounting for more than half of the reduction. Exports were reduced for the United States, Brazil, and Australia, but were raised for India.

World ending stocks were increased nearly 6 percent to 51 million bales. The projected stocks-to-use ratio of 44 percent reflects recovery from the very tight levels of the two preceding years, but is still the third lowest since 1994-95, according to USDA.