HDR1011800200501011951600 COTTON AND WOOL OUTLOOK October 11, 1995 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- COTTON AND WOOL OUTLOOK is published monthly (except January) by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. CWS--1095. ----------------------------------------------------------------------------- Cotton Production Forecast Lowered According to the latest Crop Production report, which is based on conditions as of October 1 and which does not account for any damage from Hurricane Opal, U.S. cotton production is forecast at 19.1 million bales, 1.1 million (5.5 percent) below the September forecast and 2.7 percent below last season. The production estimate was at the low end of industry forecasts which averaged 19.3 million bales. Harvested area, at 15.9 million acres, was slightly above the September estimate. However, the national average cotton yield was lowered 36 pounds per harvested acre to 579 pounds, the lowest since 1986. Continued damage from insects and dry conditions in September in most portions of the cotton belt lowered yield potential. Heavy rains and unseasonably cool temperatures during September also diminished prospects in west Texas. This season's ginnings totaled 2.46 million running bales prior to October 1, compared with 2.32 million ginned at the same date last year. In the Delta, production is estimated at 5.9 million bales, down 600,000 from the September forecast. Lower production is expected in all States, due to yield loss. The Delta States rated their cotton mostly in fair to good condition in early October. However, crop conditions diminished in all States during September, and one-half of Louisiana's crop was poor to very poor and 34 percent was rated fair on October 1. Data from objective yield surveys show Louisiana and Mississippi have the lowest number of large bolls since 1985 and Arkansas' counts are the third lowest since then. Early season data indicate Arkansas and Mississippi boll weights are the lowest of the past 10 years, and Louisiana's rank ninth. In the Southeast, production is forecast at 4.2 million bales, l percent below the September estimate. Yield losses in Alabama and South Carolina more than offset gains in Georgia. The crop was in fair to good condition on October 1. Except for South Carolina, boll opening exceeded the 5-year average development in the region, and harvest in Alabama and Georgia exceeded the average pace at 27 and 26 percent complete, respectively. In the West, yield and production losses occurred in all States, with California accounting for most of the decline. Thirty-eight percent of Arizona's crop was in good to excellent condition and harvest was 8 points behind the average pace, at 12 percent, on October 1. All of California's crop was in fair to good condition on October 1. Harvest progress, at 2 percent complete, was slightly behind the 5-year average of 4 percent. October 1 objective yield counts show Arizona and California have the lowest large boll count since 1985. Both States' boll weights are also the lowest in the past 10 years; small bolls in Arizona are ranked fifth, but are ranked tenth in California for this same time period. American-Pima production is forecast at 373,000 bales, up 5,000 from September's forecast and up 10 percent from 1994's output. Yield is indicated at 930 pounds per harvested acre, down 44 pounds from last year. California's crop is rated fair to good, as seasonably hot weather during September aided development. Limited defoliation began late in the month. Ginnings began in the Winter Garden area, and harvest in the Trans-Pecos area will begin soon. Foreign Production, Consumption, and Trade Foreign 1995/96 cotton production and exports were revised upward this month, while foreign consumption was revised downward. Foreign production is now expected to total 69 million bales, compared with 66 million in 1994/95. Foreign consumption is expected to total 75.2 million bales, compared with 73.1 million in 1994/95. U.S. export prospects shrank this month as competitors' production prospects improved and U.S. production weakened. U.S. 1995/96 exports were cut 300,000 bales to 7.5 million, 27 percent of world trade. The United States is still expected to have a better than average share of world trade in 1995 as China remains a large net importer, South Asia's exports remain constrained, and the former Soviet Union's net exports decline for the first time in 5 years. U.S. 1994/95 exports were revised 100,000 bales lower to 9.4 million, or 32 percent of world trade. The largest foreign change this month was in Pakistan's forecast production, which was raised 300,000 bales to 7.8 million for 1995/96. This reflected a reassessment of last year's crop (also up 300,000 bales) and continued favorable growing conditions. Favorable weather also helped raise Uzbekistan's forecast 200,000 bales to 5.9 million. Uzbekistan's 1995/96 crop is now forecast 55,000 bales above 1994/95, while Pakistan's is forecast 1 million bales higher. Larger crops also mean larger exports from Pakistan and Uzbekistan. Pakistan's exports were revised up 350,000 bales to 850,000, well above 1994/95's 180,000 bales. Exports from Uzbekistan are now expected to reach 5.2 million bales, 200,000 above last month's forecast for 1995/96, but 200,000 below 1994/95. While the forecast for foreign imports in 1995/96 was essentially unchanged, foreign consumption was revised down 100,000 bales as reductions for China (200,000 bales) and Ethiopia (70,000 bales) offset increases for Pakistan (100,000 bales) and Turkey (75,000 bales). U.S. Mill Use Revised The estimate of U.S. 1995/96 cotton mill consumption was lowered this month to 11.2 million bales, similar to last season's use. With cotton prices remaining around the 90-cent level, mill consumption continues below a year ago. Based on preliminary August data, however, daily average cotton consumption rose for the first time in 6 months to 40,800 480-pound bales. Total August use surpassed 1 million bales, but was slightly below August 1994. The seasonally adjusted annual rate totaled 10.6 million bales, up from July but also below a year ago. On the other hand, cotton's share of fiber use on the cotton system reached a remarkable 78 percent during August. Despite the slow start in 1995/96, cotton mill use is expected to improve from the August levels as the season progresses. While most mills are reported operating on only a 5-day workweek, demand for denim, apparel items, and sales yarn remained steady. However, the final consumption figure may hinge on the ultimate size of the declining U.S. crop, as stocks approach critical levels. The current ending stock estimate for 1995/96 is 3.2 million bales, compared with a revised beginning level of 2.65 million. The final estimate for U.S. cotton mill use in 1994/95 totaled 11.198 million bales, nearly 7.5 percent above 1993/94, and the highest in over 50 years. Upland consumption totaled 11.096 million bales, while ELS mill use reached 102,000 bales. Meanwhile, cotton's share averaged 77 percent in 1994/95, 1 percentage point above a year earlier and the highest average since 1966/67. Cotton Prices Move Higher The average price received by upland producers through mid-September was 82.1 cents per pound, up from the revised August price of 75.2 cents. A year ago, the September average equaled 65.1 cents. Similarly, the upland spot price for base quality cotton rose from 85.9 cents per pound to 90 cents. Meanwhile, the ELS spot price increased slightly during September, averaging near $1.37 per pound. Mill-delivered upland prices averaged 96.3 cents per pound in September, up from 89.7 cents in August. Last year, upland mill prices averaged 75.7 cents in September. With manmade fiber prices remaining stable over the last several months, the jump in cotton prices pushed the cost of the fiber above that for polyester once again. Polyester staple prices averaged 92 cents per pound, while rayon averaged $1.25. These manmade fiber prices were 76 cents and $1.02 per pound, respectively, during September 1994. Northern Europe cotton prices have also risen this season. During September, the A Index averaged 91.2 cents per pound, while the Memphis Territory (MT) price equaled about 98.1 cents. The MT quote remains out of the A Index calculation with 9 of the 14 styles currently being quoted. The Central Asian quote continues as the lowest offering. For the week ending October 5, the A Index averaged 93.8 cents per pound, down slightly from the previous week. The B Index followed a similar pattern with only 3 of the 8 styles quoted. During September, the B Index averaged 89.2 cents per pound. The Orleans/Texas quote remained the highest and averaged 94.1 cents in September, while Pakistan continues as the cheapest offering. For the week ending October 5, the B Index averaged 92.2 cents per pound, compared with 92.8 cents a week earlier. Likewise, the adjusted world price (AWP) moved higher in September. After reaching a season high of 79.35 cents per pound for the week of September 29- October 5, the AWP slipped to 79.08 cents this week. A year ago, however, the AWP was near 60 cents per pound. Textile Imports Rise, Exports Decline U.S. textile imports in July reached 758 million (raw-fiber equivalent) pounds, up nearly 7 percent from June and the largest since August 1994. A jump in apparel imports accounted for the overall rise, with cotton and manmade products leading the way. Although manmade imports accounted for a larger share of the monthly increase, cotton textile imports still accounted for more than half of total imports. July cotton textile imports rose 3 percent to nearly 395 million pounds. Compared with July 1994, cotton textile imports were 10 percent higher, while all fiber imports were up 9 percent. While textile imports are normally strong in July, exports, on the other hand, are not. In July, textile exports fell nearly 15 percent to 236 million pounds, the smallest since February. Declines from June occurred in all categories, with the yarn, thread, and fabric category accounting for most of the decrease. As with each end-use category, each fiber's total exports was also down in July. For July, manmade and cotton textile exports accounted for 50 and 43 percent, respectively, of the total. While cotton exports fell 17 percent from June to 101 million pounds, this figure is nearly 13 percent above July 1994. The textile trade deficit for all fibers through the first 7 months of 1995 reached 2.8 billion pounds, 11 percent higher than the same period in 1994. Similarly, the cotton textile trade deficit, at 1.6 billion pounds, was 10 percent above the first 7 months of 1994. Meanwhile, cotton's share of the total deficit continues to decline in 1995 to 58.2 percent, compared with 59 percent a year ago. Despite the monthly decrease, exports of cotton textiles and apparel should continue to limit the increases in the overall deficit and keep cotton's share near current levels. The 1995 Cotton and Wool Yearbook issue will be published in November with copies available for purchase near the end of the month. For information, call 1-800-999-6779. The next Cotton and Wool Outlook will be released on December 12, 1995. For further information, contact Leslie Meyer at (202) 501-8528 (U.S. Cotton), Robert Skinner at (202) 219-0767 (U.S. Cotton), John Lawler at (202) 501-7162 (Wool), or Steve MacDonald at (202) 219-1179 (Foreign Cotton). U.S. COTTON SUPPLY AND USE ESTIMATES ---------------------------------------------------------------------- 1995/96 ---------------------------- Item 1994/95 Aug Sep Oct ---------------------------------------------------------------------- Upland: Million acres Planted 13.55 16.46 16.47 16.53 Program 11.62 11.36 11.36 11.36 Harvested 13.16 15.61 15.62 15.69 Pounds Yield/harvested acre 705 660 612 574 Million 480-lb. bales Beginning stocks 3.30 2.42 2.57 2.59 Production 19.32 21.45 19.90 18.77 Total supply 1/ 22.65 23.87 22.48 21.36 Mill use 11.10 11.42 11.42 11.12 Exports 8.98 7.42 7.49 7.19 Total use 20.07 18.84 18.91 18.31 Ending stocks 2.59 5.17 3.66 3.15 Percent Stocks-to-use ratio 12.9 27.5 19.3 17.2 Extra-long staple: 1,000 acres Planted 169 190 195 195 Program 84 32 32 32 Harvested 166 188 193 193 Pounds Yield/harvested acre 974 916 918 930 1,000 480-lb. bales Beginning stocks 227 34 62 59 Production 338 358 368 373 Total supply 1/ 567 402 440 442 Mill use 102 85 85 85 Exports 424 280 310 310 Total use 526 365 395 395 Ending stocks 59 27 45 47 Percent Stocks-to-use ratio 11.2 7.4 11.4 11.8 ---------------------------------------------------------------------- Based on USDA estimates. 1/ Includes imports. WORLD COTTON SUPPLY AND USE ESTIMATES ---------------------------------------------------------------------- 1995/96 ------------------------------ Item 1994/95 Aug Sep Oct ---------------------------------------------------------------------- Supply: Million 480-lb. bales Beginning stocks World 27.20 29.84 29.68 29.79 Foreign 23.67 27.39 27.05 27.14 Production World 85.63 90.83 88.76 88.16 Foreign 65.97 69.01 68.49 69.02 Imports World 30.53 27.85 28.00 27.97 Foreign 30.51 27.83 27.99 27.96 Use: Mill use World 84.34 86.45 86.77 86.38 Foreign 73.14 74.95 75.27 75.18 Exports World 29.02 27.97 27.89 28.05 Foreign 19.62 20.27 20.09 20.55 Ending stocks World 29.79 34.01 31.66 31.38 Foreign 27.14 28.81 27.96 28.18 Stocks-to-use ratio Percent World 35.3 39.3 36.5 36.3 Foreign 37.1 38.4 37.1 37.5 ---------------------------------------------------------------------- Based on USDA estimates. FIBER SUPPLY ---------------------------------------------------------------------- 1995 1994 ------------------------- Item Jun Jul Aug Aug ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales Ginnings 0 0 439 699 Imports since August 1 19.0 20.5 NA 2.6 Stocks, beginning 4,971 3,655 2,650 3,530 At mills 787 759 739 676 Public storage 3,625 2,586 1,809 2,581 CCC stocks 613 292 176 322 Manmade: Million pounds Production 841.0 798.7 800.4 869.4 Noncellulosic 796.0 759.7 760.2 827.6 Cellulosic 45.0 39.0 40.2 41.8 Total since January 1 4,945.8 5,546.6 6,347.0 6,277.1 1995 1994 ------------------------ May Jun Jul Jul ---------------------------------------------------------------------- Million pounds Raw fiber imports 97.5 78.8 88.4 98.9 Noncellulosic 90.8 73.4 82.8 90.8 Cellulosic 6.7 5.4 5.6 8.1 Total since January 1 473.5 552.3 640.7 622.8 Wool and Mohair: 1,000 pounds Raw wool imports, clean 11,450 5,200 7,291 6,913 48's-and-finer 8,028 2,564 5,332 5,101 Not-finer-than-46's 3,422 2,636 1,959 1,694 Total since January 1 46,348 51,548 58,839 34,873 Wool top imports 305 520 298 298 Total since January 1 2,191 2,711 3,009 2,294 Mohair imports, clean 0 0 7 37 Total since January 1 10 10 17 38 ---------------------------------------------------------------------- NA = Not available. COTTON SYSTEM FIBER CONSUMPTION ---------------------------------------------------------------------- 1995 1994 --------------------------- Item Jun Jul Aug Aug ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales All consumed by mills 1/ 909 743 1,002 1,042 Total since August 1 1/ 10,454 11,198 1,002 1,042 SA annual rate 2/ 10,737 10,153 10,619 11,189 SA daily rate 2/ 41.3 39.0 40.8 43.0 Daily rate 41.3 35.4 43.6 45.3 Upland consumed by mills 1/ 898 737 993 1,034 Total since August 1 1/ 10,359 11,096 993 1,034 SA annual rate 2/ 10,613 10,070 10,511 11,104 SA daily rate 2/ 40.8 38.7 40.4 42.7 Daily rate 40.8 35.1 43.2 45.0 Spindles in place 7,128 6,965 6,842 7,565 Active spindles 6,651 6,496 6,394 7,171 100 percent cotton 2,888 2,770 2,777 3,018 100 percent manmade 1,121 1,127 1,090 1,223 Blends 2,642 2,599 2,527 2,930 Percent Cotton's share of fibers 76.2 77.1 78.2 77.1 Manmade: 1,000 pounds Total consumed by mills 1/ 136,558 105,834 134,349 148,405 Total since August 1 1/ 1,504,751 1,610,585 134,349 148,405 Daily rate 6,207 5,040 5,841 6,452 Noncellulosic staple 5,389 4,360 5,087 5,542 Cellulosic staple 818 680 754 910 ---------------------------------------------------------------------- 1/ Adjusted to calendar month. 2/ SA = seasonally adjusted. FIBER EXPORTS ---------------------------------------------------------------------- 1995 1994 ------------------------ Item May Jun Jul Jul ---------------------------------------------------------------------- Cotton: 1,000 480-lb. bales Upland exports 639 374 271 604 Total since August 1 8,333 8,707 8,978 6,555 Sales for next season 179 190 369 151 Total since August 1 3,399 3,589 3,958 527 ELS exports 45.7 36.3 29.5 22.1 Total since August 1 357.8 394.2 423.7 307.3 Sales for next season 8.3 4.5 10.9 22.8 Total since August 1 156.2 160.8 171.7 113.8 Manmade: Million pounds Raw fiber exports 76.8 73.5 68.8 74.2 Noncellulosic 72.3 66.5 63.3 70.7 Cellulosic 4.5 7.0 5.5 3.5 Total since January 1 414.7 488.2 557.0 499.2 Wool and Mohair: 1,000 pounds Raw wool exports, clean 964.6 1,170.4 438.7 133.9 Total since January 1 2,910.3 4,080.7 4,519.5 1,919.0 Wool top exports 1,111.6 864.8 1,059.1 1,548.9 Total since January 1 4,828.1 5,692.9 6,751.9 7,148.5 Mohair exports, clean 216.9 97.6 101.8 348.2 Total since January 1 2,304.4 2,402.0 2,503.8 2,918.1 ---------------------------------------------------------------------- FIBER PRICES ---------------------------------------------------------------------- 1995 1994 --------------------------- Item Jul Aug Sep Sep ---------------------------------------------------------------------- Domestic cotton prices: Cents per pound Adjusted World Price 73.02 70.62 76.48 61.53 Oct'95 futures 78.42 78.54 88.61 69.78 Dec'95 futures 75.20 76.64 86.68 68.91 Upland spot 41-34 93.28 85.90 90.00 71.10 Pima spot 03-46 136.50 136.50 136.88 101.40 Avg. price received by: Upland producers 86.60 75.20 82.10 65.10 Mill delivered: Cotton Actual 100.04 89.71 96.34 75.71 Raw fiber equivalent 111.16 99.68 107.04 84.12 Rayon staple Actual 125.00 125.00 125.00 102.00 Raw fiber equivalent 130.21 130.21 130.21 106.25 Polyester staple Actual 92.00 92.00 92.00 76.00 Raw fiber equivalent 95.83 95.83 95.83 79.17 Price ratios Percent Cotton/rayon 85.4 76.6 82.2 79.2 Cotton/polyester 116.0 104.0 111.7 106.3 Northern Europe cotton quotes: Cents per pound A Index NQ 85.44 91.20 75.03 Memphis Territory NQ 86.90 98.13 77.60 California/Arizona NQ 91.90 103.13 78.10 B Index 92.79 82.12 89.21 72.93 Orleans/Texas NQ 83.05 94.13 73.80 Wool prices (clean): Dollars per pound U.S. 56's 1.75 1.72 1.58 1.35 Australian 56's 1/ 2.45 2.33 2.23 1.96 U.S. 60's 2.09 2.00 1.93 1.60 Australian 60's 1/ 2.61 2.52 2.37 2.06 U.S. 64's 2.61 2.50 2.35 2.50 Australian 64's 1/ 2.92 2.84 2.66 2.59 ---------------------------------------------------------------------- NQ = No quote. 1/ In bond, Charleston, SC. TEXTILE TRADE ---------------------------------------------------------------------- 1995 1994 ----------------------------- Item May Jun Jul Jul ---------------------------------------------------------------------- Imports: 1,000 pounds 1/ Yarn, thread, and fabric 190,550 179,202 175,082 171,600 Cotton 84,068 80,601 74,564 89,902 Linen 29,713 26,440 30,196 14,362 Wool 3,998 3,964 3,415 3,797 Silk 742 693 696 812 Manmade 72,029 67,503 66,212 62,727 Apparel 391,331 468,694 517,431 471,524 Cotton 228,180 270,887 287,921 252,006 Linen 11,449 14,375 17,495 20,816 Wool 13,644 19,444 25,625 21,909 Silk 8,520 8,509 9,940 14,006 Manmade 129,539 155,479 176,450 162,787 House furnishings 31,162 32,854 35,637 28,341 Cotton 22,959 23,925 25,259 20,410 Linen 372 269 304 117 Wool 113 370 231 77 Silk 17 32 52 42 Manmade 7,700 8,258 9,792 7,695 Floor covering 24,918 22,217 22,411 20,577 Cotton 4,755 3,643 3,745 5,690 Linen 3,169 2,607 2,965 2,919 Wool 7,768 7,182 7,700 6,253 Silk 510 346 469 372 Manmade 8,716 8,440 7,532 5,343 Total imports 2/ 644,966 710,249 758,150 693,488 Cotton 343,117 382,384 394,638 358,864 Linen 44,799 43,766 51,063 40,123 Wool 25,785 31,374 37,356 33,851 Silk 9,790 9,581 11,157 15,234 Manmade 221,476 243,144 263,936 245,416 Exports: 1,000 pounds 1/ Yarn, thread, and fabric 128,585 125,315 102,193 108,824 Cotton 44,506 43,933 34,363 34,288 Linen 3,126 3,550 2,077 2,905 Wool 3,463 3,559 2,788 2,442 Silk 1,416 1,466 1,256 1,235 Manmade 76,074 72,808 61,709 67,954 Apparel 109,922 119,426 104,422 80,755 Cotton 66,491 72,293 61,191 49,602 Linen 1,828 1,830 1,760 1,726 Wool 4,808 5,435 4,544 3,690 Silk 1,518 1,735 1,621 1,535 Manmade 35,277 38,133 35,306 24,202 House furnishings 5,239 5,224 4,998 5,575 Cotton 3,048 3,139 3,149 3,465 Linen 258 234 200 163 Wool 55 73 60 56 Silk 171 159 133 87 Manmade 1,708 1,620 1,457 1,804 Floor covering 26,594 25,789 24,067 23,843 Cotton 2,437 2,356 2,391 2,482 Linen 1,214 1,102 1,047 1,069 Wool 1,174 1,214 1,490 1,463 Silk 3/ --- --- --- --- Manmade 21,768 21,117 19,138 18,829 Total exports 2/ 270,586 276,034 236,022 219,303 Cotton 116,521 121,772 101,151 89,880 Linen 6,433 6,725 5,095 5,872 Wool 9,520 10,310 8,903 7,674 Silk 3,106 3,360 3,010 2,857 Manmade 135,006 133,867 117,862 113,020 ---------------------------------------------------------------------- 1/ Raw fiber equivalent. 2/ Includes headgear. 3/ Absence of trade. 1995 ACREAGE, YIELD, AND PRODUCTION ESTIMATES ------------------------------------------------------------------- State/ Harvested area Yield Production Region Sep Oct Sep Oct Sep Oct ------------------------------------------------------------------- Lbs./ 1,000 1,000 acres harvested acre bales Upland: Alabama 615 615 500 480 640 615 Florida 109 109 691 691 157 157 Georgia 1,490 1,490 628 644 1,950 2,000 N. Carolina 780 780 535 535 870 870 S. Carolina 335 335 731 645 510 450 Virginia 107 107 700 700 156 156 Southeast 3,436 3,436 598 593 4,283 4,248 Arkansas 1,000 1,000 744 648 1,550 1,350 Louisiana 1,010 1,065 713 608 1,500 1,350 Mississippi 1,460 1,460 661 602 2,010 1,830 Missouri 435 445 701 647 635 600 Tennessee 665 665 595 570 825 790 Delta 4,570 4,635 685 613 6,520 5,920 Kansas 2 2 408 408 2 2 Oklahoma 325 325 325 295 220 200 Texas 5,700 5,700 438 408 5,200 4,850 Southwest 6,027 6,027 432 402 5,422 5,052 Arizona 359 364 1,123 1,081 840 820 California 1,175 1,175 1,123 1,083 2,750 2,650 New Mexico 51 51 781 762 83 81 West 1,585 1,590 1,112 1,072 3,673 3,551 Total Upland 15,618 15,688 612 574 19,898 18,771 Pima: Arizona 47 48 788 788 78 78 California 100 100 1,032 1,032 215 215 New Mexico 15 15 800 800 25 25 Texas 30 30 800 880 50 55 Total Pima 193 193 918 930 368 373 Total All 15,810 15,881 615 579 20,266 19,144 ------------------------------------------------------------------- Based on the October Crop Production report. END-END-END