Reinhart Cotton Market Report

19 Jul '06

4 min read

USDA/U.S. Production and Consumption (in 480 lb. bales) - Adjustments in the 2005/06 marketing year included a reduction in domestic use by 50,000 and an increase in exports back up to 17.0 million. For the 2006/07 season, the crop was reduced by 200,000 bales to 20.5 million after adopting the June 30 planted acreage report.

Abandonment was raised to 16.4 percent from 11.8 percent, based on 1996-2005 average abandonment by state, and further adjustments were made in the Southwest. Yields were left unchanged at 770 lbs. Per acre reflecting 2002-2005 averages. Consumption was decreased by 100,000 and exports were reduced by 200,000 to reflect the shift into the current season. As a net result, the ending stocks were unchanged.

Below are the last three marketing year's figures in millions, with last month's denoted in parenthesis:

                          2004/05   2005/06     2006/07 Beginning Stocks           3.5      5.5 (5.5)   6.5 (6.6) Production                 23.3     23.9 (23.9)  20.5 (20.7) Consumption               6.7      6.0 (6.0)   5.5 (5.6) Exports                   14.4     17.0 (16.8)  16.6 (16.8) Ending Stocks              5.5      6.5 (6.6)   4.9 (4.9)

U.S. Imports of Cotton Products - Latest Census Bureau statistics show a slight increase in value for January to May 2006 at 0.5 percent compared to a year ago (volume up 2.7 percent). China (-5.9 percent) and Mexico (-18.1 percent), the number one and two sourcing countries, along with Honduras (-14.3 percent) are losing share to the remaining top 10 markets, which include Indonesia (+36.9 percent), Bangladesh (+30.6 percent), Vietnam (+30.0), Cambodia (+26.9 percent), Hong Kong (+23.1 percent), India (+21.4 percent) and Pakistan (+20.4 percent).

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