U.S. Cotton Outlook
Lower disappearance and sharply higher ending stocks characterize this month=s 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 9.3 million, based on recent consumption data and continuing indications of slowing growth in consumer demand. U.S. exports are unchanged this month, as recent export sales have met expectations and export volume has been strong. Ending stocks are raised 200,000 bales to 5.0 million bales.
World Cotton Outlook
This month=s world 2000/01 estimates reflect lower production and consumption. Production is decreased by 225,000 bales in Argentina due to a reduction in estimated planted area, and 200,000 bales in both India and Turkey reflecting weather conditions. Production is increased in Brazil by 200,000 bales. Consumption is down by 175,000 bales, reflecting decreases in India, the United States, and Turkey which more than offset a 400,000-bale increase in Indonesia.
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 March, quotes of Australia, Syria, Uzbekistan, African Franc Zone, Greece, and Paraguay were included in the index. The Index averaged 54.56 cents per pound during the period, a 5.86-cent decrease from Februarys 60.42 cents per pound average. The Paraguayan quote was the lowest in the Index over the four-week period, averaging 53.17 cents per pound.
Futures Prices: Nearby May 2001 futures prices in March averaged 50.70 cents per pound, down 6.60 cents, from 57.30 cents per pound in February. The July 2001 contract averaged 51.73 cents per pound, a decrease of 6.25 cents from the previous month.
U.S. COTTON HIGHLIGHTS
Cotton Consumption: The seasonally adjusted daily rate of U.S. cotton consumption in February was 33,136 (480-lb.) bales, compared with January=s level of 34,235. A total of 681,350 bales were consumed during the four weeks in February, compared with 684,544 in the four weeks of January. The seasonally adjusted annualized consumption rate for the month of February was 8.6 million bales, down from January=s 8.9 million.
Domestic mills: Domestic mills purchased a light volume of current-crop cotton for summer delivery and a light to moderate volume of 2001-crop cotton for October through January delivery. Demand was best for color 51 and better, leaf 4 and better, staple 34 and longer, mike 35-49, strength 26 and higher. Mills continued to cancel and delay shipments. Interest in ring-spun yarn was moderate to good, while interest in open-end yarn was light to moderate. Demand for fine count yarns and coarse count yarns was moderate. Sales of domestic denim fabrics, greige cloth, sales yarn, upholstery, print cloth and industrial fabric were moderate; mill sales of specialty yarns were very light. Most mills continued to operate varying schedules to limit build-ups in inventory of finished goods.
Cotton Stocks: U.S. cotton stocks on hand in consuming establishments at the end of February totaled 470,215 bales (480-lb), up from 448,706 in January. Stocks held in public storage and compresses in February totaled 10.6 million bales, down from 11.82 million in January. Active spindles in February totaled 4.1 million, of which 2 million were dedicated to 100 percent cotton, compared with 4.6 million for the same time last year, with 2.4 million dedicated to 100 percent cotton. Cotton=s share on the cotton spindle system was 67 percent.
U.S. cotton exports in January 2001 totaled 564,000 (480-lb.) bales, 23,000 bales above December 2000 exports of 541,000 and 94,000 bales below January 2000 exports of 658,000 bales, according to the U.S. Bureau of the Census. The leading markets in January were Mexico, Turkey, Korea, Taiwan, Japan and Indonesia.
U.S. cotton imports in January 2001 totaled 200 (480-lb.) bales, 100 bales below December 2000 imports of 300 bales, and 5,500 bales less than January 2000 imports of 5,700 bales. The suppliers in January 2001 were Mexico and India.