U.S. Cotton Outlook
The MY 2002/03 U.S. production forecast was lowered slightly this month (less than one percent) as a combination of weather problems in the Southeast offset higher forecasts in all other regions. The domestic use forecast is unchanged from last month. The U.S. export forecast was reduced nearly 2 percent, primarily because export sales thus far in the marketing year have been slower than expected. These changes pushed up the U.S. ending stocks forecast 100,000 bales to 6.8 million.
Other than small adjustments to imports and use, there were no changes made to MY 2001/02 U.S. estimates. Ending stocks and export estimates were not reconciled with the Census Bureau's data. The Bureau has indicated that it will further revise its stocks survey in late October.
World Cotton Outlook
World totals for MY 2002/03 reflect slightly lower trade and consumption forecasts relative to last month. Forecast world production is virtually unchanged, as reductions in Australia, the United States and Uzbekistan are almost completely offset by increases in India, Syria, and Turkey. Most of the drop in consumption is attributable to South Korea and Brazil. Import forecasts were lowered for Korea and Brazil due to lower forecasted use, as well as India and Turkey, where domestic supply is now expected to be higher than last month's forecast. Due to adverse weather conditions affecting supply on one hand and sluggish foreign mill demand on the other, export forecasts were lowered for the four major exporters -- Australia, Franc-Zone Africa, the United States and Uzbekistan. This month's world ending stocks forecast is up nearly 2 percent, reflecting lower consumption, but also a higher beginning stocks estimate, as revisions to last year's production are carried through.
The world total production estimate for MY 2001/02 is slightly higher this month, reflecting upward revisions for Brazil, Turkey and Argentina.
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. In September, the index averaged 49.03 cents per pound, down 0.40 cents from the previous month. Syria had the lowest average quote in September at 48.60 cents per pound. The Memphis quote averaged 48.80 cents per pound, down 1.81 cents from the previous month. In New York, the average daily settlement price of the nearby October futures contract was 42.39 cents per pound in September, down from 44.64 cents in August.
U.S. Cotton Highlights
COTTON CONSUMPTION: The seasonally adjusted daily rate of U.S. cotton consumption in August 2002 was 28,145 (480-lb.) bales, down from 33,245 in July. A total of 591,325 bales were consumed during the four weeks of August, compared with 592,038 during the four weeks of July. The seasonally adjusted annualized consumption rate for the month of August was 7.346 million bales, down from 8.677 million in July.
TEXTILE MILL REPORT: Domestic mills showed interest in Light Spotted and Spotted 2001-crop cotton, but little interest in 2002-crop. Yarn demand was moderate to good. Consumption of raw cotton remained steady. Declining retail demand caused concerns about rising finished goods inventories.
COTTON STOCKS: U.S. cotton stocks on hand in consuming establishments at the end of August were 508,433 bales (480-lb), up from 477,227 in July. Stocks held in public storage and compresses in August totaled 5.88 million bales, down from 6.65 million in July. Active spindles in August totaled 2.70 million, of which 1.55 million were dedicated to 100-percent cotton, compared with 3.3 million for the same time last year, with 1.94 million dedicated to 100-percent cotton. Cotton's share on the cotton spindle system in August was 81.1 percent.
U.S. COTTON EXPORTS in July 2002 totaled 650,167 (480-lb) bales, down from 822,115 bales in June 2002, according to the U.S. Bureau of the Census. Mexico, Turkey, Thailand and Indonesia were the major destinations in July. According to the U.S. Bureau of the Census, total U.S. exports in marketing year 2001/02 were 10.4 million bales.
U.S. COTTON IMPORTS in July 2002 totaled 904 (480-lb) bales, down from 1,198 bales in June. All of the imports came from Egypt.
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