cotton economic update national cotton council mid-year board meeting aug 22-24, 2007
TRANSCRIPT
Cotton Economic Update
National Cotton CouncilMid-Year Board Meeting
Aug 22-24, 2007
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10
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80
90
100
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
$/Barrel Forecast
W. Texas Crude Oil Price
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50
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250
300
Jan
-02
Jul
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-04
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Jul
Jan
-06
Jul
Jan
-07
Jul
Fertilizer Fuel
Index of Prices Paid
Southeast 3,353 2,360 -29.6Mid-South 4,235 2,730 -35.5 Southwest 6,835 5,255 -23.1 West 525 415 -21.0
ALL UPLAND 14,948 10,760 -28.0
ALL ELS 326 298 -8.6
ALL COTTON 15,274 11,058 -27.6
2007 U.S. Cotton Acreage
2006 2007 % Actual Intentions* Change
Thousand Acres
*USDA-NASS *USDA-NASS
Crop Futures Prices
’06 ’07 Ratio
Jan-Mar Avg
Cotton (Dec) $0.593 $0.588
Corn (Dec) $2.45 $4.06 6.91
Soybeans (Nov) $6.15 $7.87 13.39
Wheat (Jul) $3.92 $5.00 8.51
Ratio of Futures Prices
2
4
6
8
10
12
14
98 99 00 01 02 03 04 05 06 07 08
Corn/Cotton Soy/Cotton Wheat/Cotton
Million Bales
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4
8
12
16
20
24
28
98 99 00 01 02 03 04 05 06 07p
U.S. Cotton Production
Million 480 Lb Bale Equivalents
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5
10
15
20
25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
U.S. Cotton Retail Consumption
2007
2006
Billion Dollars
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
02-I 02-III 03-I 03-III 04-I 04-III 05-I 05-III 06-I 06-III 07-I
Energy Clothing & Shoes
Consumption Expenditures
Million Bale Equivalents
0
4
8
12
16
20
24
28
98 99 00 01 02 03 04 05 06 07f
Imported Retail
U.S. Cotton Retail Consumption
U.S. Cotton Mill Use
Million Bales
0
2
4
6
8
10
12
98 99 00 01 02 03 04 05 06 07p
Million Bales
-5
0
5
10
15
20
25
98 99 00 01 02 03 04 05 06 07p
Net Exports Production Use Stocks
India Cotton Supply & Use
Million Bales
-2
0
2
4
6
8
98 99 00 01 02 03 04 05 06 07p
Net Exports Production Use
Brazil Cotton Supply & Use
Cotton Production & Use(Foreign less China)
Million Bales
40
45
50
55
60
65
70
75
98 99 00 01 02 03 04 05 06 07p
Mill Use Production
Million Bales
-10
0
10
20
30
40
50
60
98 99 00 01 02 03 04 05 06 07p
Net Imports Production Use Stocks
China Cotton Supply & Use
U.S. Cotton Exports
Million Bales
0
24
6
810
12
14
1618
20
98 99 00 01 02 03 04 05 06 07p
World Cotton Production & Use
Million Bales
80
90
100
110
120
130
140
98 99 00 01 02 03 04 05 06 07p
Mill Use Production Mill + Unnactd
Cotton Stocks-to-Use
0%
10%
20%
30%
40%
50%
60%
70%
98 99 00 01 02 03 04 05 06 07p
US World
Cents/Pound
35
45
55
65
75
Au
g-0
4
Oc
t-0
4
Ja
n-0
5
Ap
r-0
5
Ju
l-0
5
Oc
t-0
5
Ja
n-0
6
Ap
r-0
6
Ju
n-0
6
Se
p-0
6
De
c-0
6
Ma
r-0
7
Ju
n-0
7
Nearby NY A (FE)
Nearby NY and “A” (FE) Index
Looking Forward Bullish Factors
Production below use Stocks tighten Continued competition for available acres
40
50
60
70
80
Au
g
Sep
No
v
Jan
Mar
May
Ju
l
Sep
No
v
Dec 06 Dec 07 Dec 08
December Cotton Futures
Cents per Pound
175
225
275
325
375
425
475
Au
g
Oct
Dec
Feb
Ap
r
Ju
n
Au
g
Oct
Dec
Dec 06 Dec 07 Dec 08
December Corn Futures
Cents per Bushel
500
600
700
800
900
1000
Au
g
Oct
Dec
Feb
Ap
r
Ju
n
Au
g
Oct
Nov 06 Nov 07 Nov 08
November Soybean Futures
Cents per Bushel
Ratio of Futures Prices
2
4
6
8
10
12
14
98 99 00 01 02 03 04 05 06 07 08
Corn/Cotton Soy/Cotton Wheat/Cotton
Looking Forward Bullish Factors
Production below use Stocks tighten Continued competition for available acres
Bearish Factors Expanding production in other countries (India) Maintaining demand at higher price levels
Index (2005 = 100)
80
90
100
110
120
130
140
Jan
-04
Ap
r-04
Au
g-0
4
No
v-04
Mar
-05
Jun
-05
Sep
-05
Jan
-06
Ap
r-06
Au
g-0
6
No
v-06
Mar
-07
Jun
-07
A (FE) Asian Polyester Cotlook Yarn
Price Indices
Looking Forward Bullish Factors
Production below use Stocks tighten Continued competition for available acres
Bearish Factors Expanding production in other countries (India) Maintaining demand at higher price levels
Wild cards Relying on China to buy 40-50% of US crop General economic performance
MerchantsGinners Cottonseed
Producers
Cooperatives
WarehousesManufacturers