U.S. Cotton Outlook
The 1998/99 season is unchanged from last months estimate.
The 1999/2000 estimate features higher exports, unchanged consumption and a modest change in production. Exports were increased by 200,000 bales to 6.8 million based on continued strong export sales in recent weeks. Ending stocks were decreased by 200,000 bales to reflect the higher export number.
The 2000/01 forecast is unchanged except for the decrease in beginning stocks which is passed through to ending stocks.
World Cotton Outlook
The 1998/1999 world outlook includes minor adjustments in the consumption and import estimates for several countries. Consumption and imports were increased by 154,000 and 93,000 bales respectively. India accounted for most of the change.
The 1999/2000 world outlook features an increase in consumption of 230,000 bales, and decreases in imports of 197,000 bales and production of 76,000. These changes resulted in a decrease in ending stocks of 563,000 bales. China's consumption for the current season is increased 300,000 bales. The estimates for Greece, Pakistan and India were increased 100,000 bales each, which more than offset a decrease of 350,000 bales in Indonesia. As a result, world consumption increased to 90.76 million bales. Imports were decreased by nearly 200,000 bales. The change was due primarily to a reduction of 400,000 bales in Indonesia and smaller reductions in Poland and Hong Kong, more than offsetting a 300,000- bale increase in India.
The 2000/01 world forecast saw an increase in total foreign production of one million bales to 68 million, unchanged consumption and trade, and a decrease in beginning stocks, which all resulted in a 440,000-bale increase in ending stocks to 36.99 million.
Cotlook A Index: The A-Index, a principal measure of international cotton prices, is an average of the five lowest quotes of cotton for delivery to Northern Europe ports. During May, quotes of Australian, Syrian, Paraguayan, Uzbekistan, and African Franc Zone cotton were included n the Index. The Index averaged 60.53 cents per pound during the period, a
1.8-cent increase from Aprils 58.72 cents per pound average. The African "Franc Zone"quote was the lowest in the Index over the four-week period, averaging 58.45 cents per pound. On June 8, the A-Index was 60.05 per pound, a decrease of 0.35 cents from last months close of 60.40 cents per pound. The price decrease was caused in part by rain in hitherto parched West Texas.
Futures Prices: United States cotton futures prices represent the current price of United States cotton for delivery at a future date. Futures prices in May weakened in comparison to Aprils prices due to rains in Texas. On Thursday, June 8, July 2000 contract settled at 58.19 cents per pound, a decrease of 2.61 cents from the previous months average. October 2000 contract settled at 60.73 cents per pound, with a decrease of 0.77 cents from the previous month.
U.S. Cotton Highlights
Cotton Consumption: The seasonally adjusted daily rate of United States cotton consumption in April amounted to 38,774 (480-lb.) bales, compared with Marchs level of 39,055 bales. A total of 796,333 bales were consumed during the four weeks in April, compared with 1,002,300 bales in March (5 weeks). The seasonally adjusted annualized consumption rate for the month of April was 10.12 million bales, down from Marchs 10.19 million bales.
Domestic mills purchased a light volume of current crop cotton for prompt and nearby delivery and a very light volume of 2000-crop cotton for September 2000 through September 2001 delivery. Interest was best for color 41 and better, leaf 4 and better, staple 34 and longer, mike 35-49. A few mills continue to seek current crop cotton for summer delivery. Most mills have covered a large percent of new crop needs and have not been in the market for additional crop year-2000 cotton. Interest continues to be very good for ring-spun yarns and moderately good for open-end yarns. Demand was good for both fine and coarse count yarns. Mill sales of sales yarn, upholstery and industrial fabrics were good; and specialty yarn, greige cloth, domestic denim fabrics and print cloth were moderate. Most mills operated a six-day workweek.
Cotton Stocks: United States cotton stocks on hand in consuming establishments at the end of April totaled 496,775 bales (480-lb), down from 502,408 in March. Stocks held in public storage and compresses in April totaled 6.7 million bales, down from 8.0 million bales in March. Active spindles in April totaled 4.36 million, of which 2.36 million were dedicated to 100 percent cotton, compared with 4.79 million for the same month last year, during which 2.6 million were dedicated to 100 percent cotton. Cottons share on the cotton spindle system was 77.4 percent in April.
United States cotton exports in March 2000 totaled 978,000 (480-lb.) bales, 242,000 bales above February 2000 exports of 736,000 bales and 757,000 bales above March 1999 exports of 221,000 bales, according to the U.S. Bureau of the Census. The leading markets in March were Mexico, Turkey, Brazil, Indonesia, Taiwan, and Japan with modest exports to Hong Kong, Thailand and Korea.
United States cotton imports in March 2000 totaled 2,600 (480-lb.) bales, down, 6,300 bales from February 2000 when 8,900 bales were imported and 41,000 bales less than March 1999 imports of 43,600 bales. The major supplier in March 2000 was Egypt, with very modest imports from Mexico and India.