Download - Situation for 2011-2013 Crops
Situation for 2011-2013 Crops• Chinese government purchasing 75 million
bales into reserves at well above world price
• Despite world production consistently exceeding use, prices traded in relatively narrow range, “A” Index averaging close to 90¢
China Absorbing SurplusProduction
less Use Outside China
China’s Imports
2011/12 27.8 24.5
2012/13 17.7 20.3
2013/14 11.3 11.0
3-Yr Total 56.8 55.9
China Absorbing SurplusProduction
less Use Outside China
China’s Imports
Change in China’s Stocks
Change in Stocks
Outside China
2011/12 27.8 24.5 20.5 2.6
2012/13 17.7 20.3 19.3 -3.4
2013/14 11.3 11.0 8.0 0.5
3-Yr Total 56.8 55.9 47.8 -0.3
China Absorbing SurplusProduction
less Use Outside China
China’s Imports
Change in China’s Stocks
Change in Stocks
Outside China
2011/12 27.8 24.5 20.5 2.6
2012/13 17.7 20.3 19.3 -3.4
2013/14 11.3 11.0 8.0 0.5
3-Yr Total 56.8 55.9 47.8 -0.3
2014/15
Production Outside China
NCC Acreage Survey• Distributed on Dec 18• Responses collected through Jan 17• Asked for acres of upland cotton, ELS cotton,
corn, soybeans, wheat, other crops in ‘13 and intentions for ’14; also asked price expectations
Pre-Planting Market Signals Cotton Corn Soybeans Cot/Corn Cot/Soy
2014 78.20¢ $4.53 $11.31 17.3 6.9
2013 83.18¢ $5.70 $12.84 14.6 6.5
2012 92.08¢ $5.65 $12.59 16.3 7.32011 118.08¢ $5.88 $13.31 20.1 8.92010 73.70¢ $4.04 $9.37 18.3 7.92009 51.65¢ $4.17 $8.98 12.4 5.8
U.S. Cotton Area
06 07 08 09 10 11 12 13 140
3
6
9
12
15
1815.27
10.839.47 9.15
10.97
14.74
12.3110.41
Million Acres
20% 34% -16% -15%
U.S. Cotton Area
06 07 08 09 10 11 12 13 140
3
6
9
12
15
1815.27
10.839.47 9.15
10.97
14.74
12.3110.41 11.26
Million Acres
20% 34% 8%-16% -15%
2014 Southeast Acreage2013 Actual
2014Intended
%Change
Alabama 365 376 2.9Florida 131 117 -10.9Georgia 1,370 1,372 0.1North Carolina 465 440 -5.3South Carolina 258 248 -3.7Virginia 78 81 4.1Southeast 2,667 2,634 -1.2
Total may not add due to rounding.
2014 Mid-South Acreage2013 Actual
2014Intended
%Change
Arkansas 310 296 -4.6Louisiana 130 157 20.7Mississippi 290 390 34.6Missouri 255 257 0.8Tennessee 250 289 15.4Mid-South 1,235 1,389 12.5
Total may not add due to rounding.
2014 Southwest Acreage2013 Actual
2014Intended
%Change
Kansas 27 31 13.9Oklahoma 185 201 8.4Texas 5,800 6,508 12.2Southwest 6,012 6,739 12.1
Total may not add due to rounding.
2014 West Acreage2013 Actual
2014Intended
%Change
Arizona 160 165 3.2California 93 68 -26.9New Mexico 39 42 7.4West 292 275 -5.8
Total may not add due to rounding.
2014 ELS Acreage2013 Actual
2014Intended
%Change
Arizona 1.5 3.6 137.2California 187 205 9.6New Mexico 3.5 4.0 13.4Texas 9 12.2 35.2ALL ELS 201 225 11.8
Total may not add due to rounding.
U.S. Cotton Production
03 04 05 06 07 08 09 10 11 12 13 140
5
10
15
20
25
30
17.3
13.216.4
Million Bales
International Area Outside China
03 04 05 06 07 08 09 10 11 12 13 145052545658606264666870
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
62.4 61.4 62.1
Million Acres
Acres A Index (t-1)
A Index ($/Lb)
Cotton Production Outside China
03 04 05 06 07 08 09 10 11 12 13 1460
65
70
75
80
85
90
95
88.184.8
87.9
Million Bales
Mill Use Outside China
U.S. Mill Use
• ‘14 Farm Bill continues EAAP at 3 c/lb
• Several new investments underway
08 09 10 11 12 13 143.0
3.2
3.4
3.6
3.8
4.0
3.3
3.53.6
3.7
Mill
ion
Bale
s
Cotton Mill Use Outside China
03 04 05 06 07 08 09 10 11 12 13 140
102030405060708090
74.0 70.4 73.5 76.4
Million Bales
China Absorbing SurplusProduction
less Use Outside China
China’s Imports
Change in China’s Stocks
Change in Stocks
Outside China
2011/12 27.8 24.5 20.5 2.6
2012/13 17.7 20.3 19.3 -3.4
2013/14 11.3 11.0 8.0 0.5
3-Yr Total 56.8 55.9 47.8 -0.3
2014/15 11.5
China Supply & Demand
Key Assumptions• Accumulating reserves ends with the ‘13 crop• Target price program planned for Xinjiang– Level speculated at 18,300 RMB/ton• Current reserve price at 20,400 RMB/ton
• TRQ of approximately 4.1 million bales• Some additional quota for processing trade
China Balance Sheet
11/12 12/13 13/14 14/15 Change
Production 34.0 35.0 33.0 30.1 -2.9
Mill Use 38.0 36.0 36.0 36.4 0.4
Imports 24.5 20.3 11.0 6.4 -4.6
Stocks 31.1 50.4 58.3 58.3 0.0
Stocks/Use 82% 140% 162% 160%
Million Bales
China Absorbing Surplus?Production
less Use Outside China
China’s Imports
Change in China’s Stocks
Change in Stocks
Outside China
2011/12 27.8 24.5 20.5 2.6
2012/13 17.7 20.3 19.3 -3.4
2013/14 11.3 11.0 8.0 0.5
3-Yr Total 56.8 55.9 47.8 -0.3
2014/15 11.5 6.4
Cotton Trade
U.S. Cotton Exports
03 04 05 06 07 08 09 10 11 12 13 1402468
101214161820
13.0
10.5 10.0
Million Bales
Competitive Export Markets• World trade- 35.8 mb in ‘14, down from 38.5 mb in ‘13
– U.S. market share at 28%, up from 27% in ’13 (34% share in ‘08-12)
• For ‘14, U.S. exports at 59% of exportable supplies– Exports normally at 70-75% of exportable supplies
• For ‘14, approximately 20% of U.S. exports to China– China accounts for 38% of U.S. exports on average
• For ‘14, U.S. cotton accounts for 31% of China’s imports– Average market share has been 37%
U.S. Balance Sheet
11/12 12/13 13/14 14/15 Change
Production 15.57 17.32 13.19 16.37 3.19
Mill Use 3.30 3.50 3.60 3.73 0.13
Exports 11.71 13.03 10.50 9.98 -0.52
Stocks 3.35 3.90 3.00 5.68 2.68
Stocks/Use 22% 24% 21% 41%
Million Bales
World Balance Sheet12/13 13/14 14/15 Change
Production 123.1 117.8 118.0 0.2Mill Use 106.4 109.5 112.8 3.3Trade 46.0 38.5 35.8 -2.6Stocks 89.2 97.6 103.0 5.4
China 50.4 58.3 58.3 0.0
All Others 38.8 39.3 44.6 5.3
Million Bales
China Absorbing Surplus?Production
less Use Outside China
China’s Imports
Change in China’s Stocks
Change in Stocks
Outside China
2011/12 27.8 24.5 20.5 2.6
2012/13 17.7 20.3 19.3 -3.4
2013/14 11.3 11.0 8.0 0.5
3-Yr Total 56.8 55.9 47.8 -0.3
2014/15 11.5 6.4 0.0 5.3
Summary Points• Production continues to exceed use– Wildcards: weather and China’s area– Growth in demand not enough to prevent
increase in stocks• Exportable supplies chasing smaller Chinese
imports
Cotton Prices
08 09 10 11 12 13 140
50
100
150
200
250
Nearby NY A Index
Cents per Lb