U.S. Cotton Outlook
This months 2000/01 U.S. forecasts include slightly lower production and domestic mill use; ending stocks are unchanged. Production is decreased 111,000 bales, mainly reflecting lower production in Texas, partially offset by higher production in California. Domestic mill use is reduced 100,000 bales, based on weak cotton consumption to date and a slowdown in overall textile business. Ending stocks remain at 3.9 million bales, 22.3 percent of total use.
World Cotton Outlook
The world 2000/01 estimates reflect higher stocks relative to last month, with minor adjustments to total production, consumption, and trade. Significant changes are made to production in several countries: Increases for Syria, Brazil, and Turkey nearly offset decreases for India, Uzbekistan, the African Franc Zone countries, the United States, and Australia. World consumption is reduced slightly, reflecting decreases for India, Mexico, and the United States, partially offset by increases for Brazil and Russia. The reduction in estimated 2000/01 consumption, combined with a significant increase in estimated consumption for 1999/2000, reduces this seasons consumption growth rate to a marginal 0.4 percent, compared to 7.7 percent growth in the previous season. Larger beginning and ending stocks for 2000/01 result mainly from revisions to prior years estimates, mainly for Turkey and India. Total estimated world ending stocks are raised 1.7 percent from last month.
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 European ports. During November, quotes of Greek, Uzbekistan, African Franc Zone, Syria, and Pakistan were included in the Index. The Index averaged 63.98 cents per pound during the period, a 3.08-cent increase from Octobers 60.90 cents per pound average, a probable indication of tightening world supplies. The Pakistani quote was the lowest in the Index over the four-week period, averaging 63.05 cents per pound. On Thursday, November 30, the A-Index was 65.75 cents per pound, an increase of 2.05 cents from last months close of 63.70 cents per pound.
Futures Prices: December futures prices in November averaged 64.65 cents per pound, up1.35 cents, from 63.30 cents per pound in October. On Thursday, November 30, the December 2000 contract settled at 65.23 cents per pound, an increase of 0.27 cents from the previous months average. The March 2001 contract settled at 68.35 cents per pound, an increase of 0.86 cents from the previous month.
U.S. COTTON HIGHLIGHTS
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in October was 36,720 (480-lb.) bales, compared with Septembers level of 37,578. A total of 770,033 bales were consumed during the four weeks in October, compared with 963,369 in September (five weeks). The seasonally adjusted annualized consumption rate for the month of October was 9.58 million bales, down from Septembers 9.81 million.
Domestic mills purchased a very light volume of cotton for first quarter 2001 for third quarter 2001 delivery. Mill inquiries were light. Many mills have their anticipated needs covered through May 2001 and are reluctant to acquire additional stock. Interest in ring-spun yarns was moderate while interest in open-end yarns was very light. Demand for fine count yarns was moderate while demand for coarse count yarns was very light. Sales of domestic denim fabrics, greige cloth, sales yarn, upholstery, print cloth, and industrial fabrics was light; mill sales of specialty yarn were very light. Some mills took two to five days off for Thanksgiving.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of October totaled 437,152 bales (480-lb), down from 487,094 in September. Stocks held in public storage and compresses in October totaled 8.42 million bales, up from 4.24 million in September. Active spindles in October totaled 4.33 million, of which 2.35 million were dedicated to 100 percent cotton, compared with 4.57 million for the same month last year, with 2.41 million dedicated to 100 percent cotton. Cottons share on the cotton spindle system was 78.9 percent in October.
U.S. cotton exports in September 2000 totaled 336,000 (480-lb.) bales, 94,000 bales below August 2000 exports of 430,000 and 190,000 above September 1999 exports of 146,000, according to the U.S. Bureau of the Census. The leading markets in September were Mexico, Korea, Canada, Japan, Indonesia, and Hong Kong.
U.S. cotton imports in September 2000 totaled about 400 (480-lb.) bales, 1,000 bales below August 2000 imports of 1,400, and 9,200 less than September 1999 imports of 9,600 bales. The major supplier in September 2000 was Egypt, with very modest imports from Mexico and India.