The losses came after the US Department of Agriculture (USDA) released its monthly supply and demand report, which showed a rise in its forecast for US cotton stocks for the 2014/15 crop year, which ends in July, to 4.4 million 480-pound bales, up from 4.2 million in its March forecast.
The increase was a result of an uptick in the US production estimate to 16.3 million bales, up from 16.08 in March, while the USDA’s forecast for US exports remained unchanged at 10.7 million bales.
Several traders had expected the USDA to raise its projection for exports from the United States, the world’s top exporter, due to a string of strong export sales reports that have brought total sales within striking distance of the USDA’s target with four months left in the season.
“Even if they raised the crop a little bit, we have exported so much cotton that we would have seen some kind of uptick in exports,” said Keith Brown, proprietor and cotton trader at Keith Brown and Co in Moultrie, Georgia.
The USDA also raised its expectation for world ending stocks to 110.09 million bales, up from 110.06 million bales forecast in March.
The market initially rose after the USDA’s weekly export sales report showed shipments totaled 433,800 bales in the week ended April 2, a marketing-year high, with the primary destinations being China, Vietnam and Turkey.
New net sales totaled 45,700 bales, down from the prior week and the prior four-week average, though traders said at this point in the season the strong shipments figure was more meaningful.