Official forecasts of US and world cotton ending stocks have got tighter. A 3,40,000 month-over-month increase in foreign consumption, most of which was in India, reinforced the tightening of the world balance sheet. The bottom line was a large 2.88 million bale reduction in 2017-18 world ending stocks. Such an adjustment would be price supportive.

The December revisions to 2017-18 US cotton continued a trend of modest adjustments to US production and ending stocks. On the supply side, the all-cotton national average yield was raised slightly to a record 902 pounds per acre. This resulted in a 63,000 bale net increase in US production.

US exports were raised 3,00,000 bales month-over-month, presumably to jibe with the historically fast pace of total export commitments of US cotton. The upward revision of US exports made up for the downward adjustments in foreign production. After slightly adjusting the unaccounted fudge factor, projected US ending stocks declined from 6.1 to 5.8 million bales, month over month.

The reduction in supply on the Indian subcontinent is in keeping with recent news reports and speculation about lower production there, so this outcome was probably expected by many traders and analysts.

The holidays are generally not known for tightening. Wallets get lighter. Beltlines get wider.