U.S. Cotton Outlook

The U.S. estimates for 2001/02 are unchanged this month.

This month the U.S. forecast for 2002/2003 shows lower production, domestic use and ending stocks. Production is down 440,000 bales to 17.375 million based on unchanged area and lower yields, primarily in the Southeast. Domestic mill use is down 200,000 bales as mill recovery has stagnated in the face of rapidly growing textile imports. Exports are unchanged at 10.8 million bales. Export sales increased in recent weeks from sluggish sales levels earlier. Ending Stocks are down 300,000 bales to 6.5 million.

World Cotton Outlook

The 2001/2002 world estimates reflect minor changes for India, Indonesia, Kyrgystan, and Tanzania. Ending stocks are down 101,000 bales.

The 2002/2003 production forecast is down 725,000 bales from last month at 87.4 million bales. Decreases in addition to the United States include: Australia (500,000 bales), Argentina and Egypt (125,000 bales each). These decreases more than offset a 300,000-bale increase in India. Use was raised 175,000 bales to 96.4 million bales. A 250,000-bale increase in China, together with smaller increases in Argentina and Indonesia, more than offset the U.S. decrease. Trade was largely unchanged, with a 200,000-bale reduction in imports for India partially offset by a 100,000-bale increase in Indonesia. As a result of lower beginning stocks and production and higher use, ending stocks were reduced by 1.2 million bales to 38.8 million, the lowest level since 1995/96.

Cotton Prices

The A-Index, a principal measure of international cotton prices, is an average of the five lowest quotes of major cotton growths for delivery to Northern European ports. In November, the index averaged 52.24 cents per pound, up 2.68 cents from the previous month. Greece had the lowest average quote in November at 51.93 cents per pound. The Memphis quote averaged 55.48 cents per pound, up 3.88 cents from the previous month. Memphis/Eastern cotton was not quoted in the index during the last two weeks of November. In New York, the average daily settlement price of the nearby futures contract was 47.81 cents per pound in November, up from 42.08 cents per pound in October.

U.S. Cotton Highlights

COTTON CONSUMPTION: The seasonally adjusted daily rate of U.S. cotton consumption in October 2002 was 28,088 (480-lb.) bales, down from 28,984 in September. A total of 596,617 bales were consumed during the four weeks of October, compared with 760,465 during the five weeks of September. The seasonally adjusted annualized consumption rate for the month of October was 7.331 million bales, down from 7.565 million in September.

TEXTILE MILL REPORT: Domestic mills purchased light volumes of 2002-crop cotton. Most mills have reportedly covered anticipated needs through the second quarter of 2003. Ring-spun yarn demand was light to moderate. Open-end yarn demand was moderate to good. Concerns persist about the quality of the U.S. 2002 crop.

COTTON STOCKS: U.S. cotton stocks on hand in consuming establishments at the end of October were 488,604 (480-lb.) bales, down from 530,163 in September. Stocks held in public storage and compresses in October totaled 9.56 million bales, up from 5.92 million in September. Active spindles in October totaled 2.68 million, of which 1.59 million were dedicated to 100-percent cotton, compared with 3.23 million for the same time last year, with 1.87 million dedicated to 100-percent cotton. Cotton's share on the cotton spindle system in October was 80.7 percent.

U.S. COTTON EXPORTS in September 2002 totaled 529,297 (480-lb.) bales, or $115.89 million, according to the U.S. Bureau of the Census. That is down from 649,556 bales, worth $134.91 million, in August 2002. Mexico, China and Indonesia were the major destinations in September.

U.S. COTTON IMPORTS in September 2002 totaled 6,678 (480-lb.) bales, or $2.58 million, up from 2,949 bales ($1.42 million) in August. Egypt accounted for 6,214 bales; the rest was imported from Australia.

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Last modified: Sunday, March 17, 2013