U.S. Cotton Outlook
Lower disappearance and sharply higher ending stocks characterize this months U.S. 2000/01 projections. Production and imports are unchanged resulting in no change in total supply. Domestic mill use is reduced 200,000 bales to 9.5 million based on recent months consumption data and continuing indications of slowing growth in consumer demand. U.S. exports are reduced 100,000 bales, as recent export sales have not met expectations even though export volume has been strong. Prospects for strong late-season exports are constrained by sluggish foreign demand and the large production forecast for Southern Hemisphere countries. Ending stocks are raised 200,000 bales to 4.7 million bales
World Cotton Outlook
This months world 2000/01 estimates reflect marginally higher production and lower consumption, and trade. Production is increased by 100,000 bales in Australia, reflecting continued good weather. Consumption is down by over 250,000 bales, reflecting decreases in Turkey and the United States. Slight historical adjustments were made to consumption and trade for Azerbaijan and Colombia.
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 February, quotes of Australia, Syria, Uzbekistan, African Franc Zone, and Paraguay were included in the Index. The Index averaged 60.42 cents per pound during the period, a 3.71-cent decrease from Januarys 64.13 cents per pound average. The Paraguayan quote was the lowest in the Index over the four-week period, averaging 56 cents per pound. On March 1, the A-Index was 57.35 cents per pound, a decrease of 5.10 cents from a month ago. Weak world demand is attributed to the fall in price.
Futures Prices: Nearby March 2001 futures prices in February averaged 57.70 cents per pound, down 2.84 cents, from 60.54 cents per pound in January. The May 2001 contract averaged 57.30 cents per pound, a decrease of 2.78 cents from the previous month.
U.S. COTTON HIGHLIGHTS
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in January was 34,685 (480-lb.) bales, compared with Decembers level of 37,307. A total of 690,015 bales were consumed during the four weeks in January, compared with 777,433 in the five weeks of December. The seasonally adjusted annualized consumption rate for the month of January was 9.05 million bales, down from Decembers 9.74 million.
Domestic mill: Domestic mill purchases were very light. Interest was good for color 41 and better, leaf 4 and better, staple 34 and longer, mike 35-49, strength 26 and higher. Interest in ring-spun yarn was good, while interest in open-end yarn was moderate. Demand for fine count yarns was good and coarse count yarns was moderate. Sales of domestic denim fabrics, greige cloth, sales yarn, upholstery, print cloth and industrial fabric were light to moderate; mill sales of specialty yarns were very light. A few mills took time off during the past few weeks in continuing efforts to reduce inventories. Other mills have scaled back spinning operations and brought in yarn or greige goods in an effort to improve cost efficiency.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of January totaled 448,148 bales (480-lb), up from 424,660 in December. Stocks held in public storage and compresses in January totaled 11.78 million bales, down from 12.46 million in December. Active spindles in January totaled 3.94 million, of which 2.10 million were dedicated to 100 percent cotton, compared with 4.42 million for the same month last year, with 2.40 million dedicated to 100- percent cotton. Cottons share on the cotton spindle system was 78.1 percent in January.
U.S. cotton exports in December 2000 totaled 541,000 (480-lb.) bales, 106,000 bales above November 2000 exports of 435,000 and 113,000 bales below December 1999 exports of 654,000 bales, according to the U.S. Bureau of the Census. The leading markets in December were Mexico, Korea, Indonesia, Japan and Canada.
U.S. cotton imports in December 2000 totaled 300(480-lb.) bales, 1,600 bales below November 2000 imports of 1,900 bales, and 4,900 bales less than December 1999 imports of 5,200 bales. The major supplier in December 2000 was Egypt, with very modest imports from Mexico.