World Real GDP Growth
6%
Actual
Estimate
5%
4%
3%
2%
1%
0%
-1%
05
06
07
08
09
10
11
12
13
14
IMF, January 2013
NCC Acreage Survey
• Distributed on Dec 18
• Responses collected through Jan 23
• Asked for acres of upland cotton, ELS cotton,
corn, soybeans, wheat, Other crops in ‘12 and
intentions for ’13; also asked price
expectations
Pre-Planting Market Signals
Cotton
Corn
Soybeans Cot/Corn Cot/Soy
2013
78.96¢
$5.92
$12.94
13.3
6.1
2012
92.08¢
$5.65
$12.59
16.3
7.3
2011 118.08¢
$5.88
$13.31
20.1
8.9
2010
73.70¢
$4.04
$9.37
18.3
7.9
2009
51.65¢
$4.17
$8.98
12.4
5.8
2008
80.72¢
$5.36
$12.73
15.0
6.3
U.S. Cotton Area & Prices
Million Acres
Price Ratio
18
24
Acres
Cotton/Corn
Cotton/Soy
15
18
12
12.32
9
9.01
12
6
6
3
0
0
06
07
08
09
10
11
12
13
2013 Southeast Acreage
2012
Actual
2013
Intended
%
Change
Alabama
380
320
-15.7
Florida
108
103
-4.5
1,290
1,093
-15.3
North Carolina
585
398
-32.0
South Carolina
299
265
-11.4
86
62
-28.3
2,748
2,241
-18.5
Georgia
Virginia
Southeast
Total may not add due to rounding.
2013 Mid-South Acreage
2012
Actual
2013
Intended
%
Change
Arkansas
595
221
-62.9
Louisiana
230
144
-37.3
Mississippi
475
199
-58.1
Missouri
350
239
-31.6
Tennessee
380
199
-47.6
Mid-South
2,030
1,003
-50.6
Total may not add due to rounding.
Arkansas Crop Returns
$ per Acre
$400
Difference Between Corn and Cotton Returns
$300
$200
$100
$0
-$100
06
07
08
09
10
11
12
13
2013 Southwest Acreage
2012
Actual
2013
Intended
56
50
-10.4
305
267
-12.3
Texas
6,550
4,910
-25.0
Southwest
6,911
5,228
-24.4
Kansas
Oklahoma
Total may not add due to rounding.
%
Change
2013 West Acreage
2012
Actual
2013
Intended
%
Change
Arizona
200
193
-3.6
California
142
112
-21.4
46
36
-21.0
388
341
-12.2
New Mexico
West
Total may not add due to rounding.
2013 ELS Acreage
2012
Actual
Arizona
2013
Intended
%
Change
3
3
-16.0
225
190
-15.6
New Mexico
2
2
-26.0
Texas
8
8
3.9
238
203
-15.0
California
ALL ELS
Total may not add due to rounding.
% Changes in Futures Prices
8%
Cotton
6%
Corn
Soybeans
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
12/18
12/25
1/1
1/8
1/15
1/22
1/29
2/5
U.S. Cotton Production
Million Bales
18
16
13.30
14
12.86
12
10
8
07 05 04
98 00 11
U.S. Balance Sheet
Million Bales
10/11
11/12
12/13
18.10
15.57
17.01
Mill Use
3.90
3.30
3.43
Exports
14.38
11.71
12.20
Stocks
2.60
3.35
4.77
Stocks/Use
14%
23%
31%
Production
13/14 Change
12.86
-4.15
Cotton’s Share of U.S. NDC
50%
48%
46%
44%
42%
40%
38%
36%
34%
32%
30%
06
07
08
09
10
11
12
13
Apparel Import Per-Unit Values
1.50
Ratio of Cotton to MMF
1.45
1.40
1.35
1.30
1.25
1.20
1.15
1.10
1.05
1.00
06
07
08
09
10
11
12
13
Net Domestic Fiber Consumption
Million Bale Equivalents
35
Cotton
Other
30
25
20
15
10
5
0
03
04
05
06
07
08
09
10
11
12
U.S. Balance Sheet
Million Bales
10/11
11/12
12/13
18.10
15.57
17.01
12.86
-4.15
Mill Use
3.90
3.30
3.43
3.48
0.05
Exports
14.38
11.71
12.20
Stocks
2.60
3.35
4.77
Stocks/Use
14%
23%
31%
Production
13/14 Change
Int’l Area (Excluding China)
Million Acres
A Index ($/Lb)
70
$1.80
Acres
68
A Index (t-1)
$1.60
66
$1.40
64
$1.20
61.8
62
59.4
60
$1.00
$0.80
58
$0.60
56
54
$0.40
52
$0.20
50
$0.00
03
04
05
06
07
08
09
10
11
12
13
Int’l Mill Use (Excluding China)
Million Bales
80
67.2
70
71.0
61.8
60
50
40
30
20
10
0
03
04
05
06
07
08
09
10
11
12
13
Yarn Export Values – Cotton Price
Cents per Lb
120
Pakistan
India
100
80
60
40
20
0
07
08
09
10
11
12
13
Fiber Prices
Cents per Lb
250
China Cotton Price
China Polyester
200
A Index
150
100
50
0
08
09
10
11
12
13
Yarn Export Values – Cotton Price
Cents per Lb
120
Pakistan
India
China
100
80
60
40
20
0
07
08
09
10
11
12
13
China Cotton Yarn Imports
Thousand Bales
800
700
600
500
400
300
200
100
0
06
07
08
09
10
11
12
13
China Cotton Use
Million Bales
60
Mill Use
Yarn Imports
50
50.0
40
30
35.5
34.3
12
13
20
10
0
04
05
06
07
08
09
10
11
China’s Reserves: The Big Unknown
Million Bales
12/13
13/14
Change
Mill Use
35.5
34.3
-1.2
Production
33.5
30.7
-2.8
Gov’t Purchases
28.5
26.1
-2.4
Gov’t Sales
16.1
21.0
4.9
Stocks
40.6
43.8
3.2
33.8
38.8
5.0
12.5
6.9
-5.6
Gov’t Reserves
Imports
World Cotton Trade
Million Bales
50
US Exports
45
Imports
38.9
40
35.9
35
30
25
20
15
10
5
0
04
05
06
07
08
09
10
11
12
13
U.S. Balance Sheet
Million Bales
10/11
11/12
12/13
18.10
15.57
17.01
12.86
-4.15
Mill Use
3.90
3.30
3.43
3.48
0.05
Exports
14.38
11.71
12.20
10.61
-1.59
Stocks
2.60
3.35
4.77
3.55
-1.23
Stocks/Use
14%
23%
31%
25%
Production
13/14 Change
World Balance Sheet
Million Bales
11/12
12/13
13/14
Change
Production
124.1
118.8
110.1
-8.7
Mill Use
103.1
106.1
108.7
2.6
Trade
44.7
38.9
35.9
-3.0
Stocks
68.9
81.7
83.1
1.4
China Reserves
21.4
33.8
38.8
5.0
Other Stocks
47.5
47.9
44.3
-3.6
Cotton Trade Balance
Million Bales
Production less Use
Outside China
China
Imports
Difference
2010/11
17.8
12.0
5.8
2011/12
25.9
24.5
1.4
2012/13
14.7
12.5
2.2
2013/14
4.9
6.9
-2.0
Buy & Sell
4.9
4.1
0.8
Buy & Hold
4.9
11.0
-6.1
Summary Points
• Resistance breaking out of recent price range
– China reserves a key factor
– Sustaining demand
• Smaller U.S. acreage & production in ‘13
– Remember: $6 corn & $13 soybeans resulted from
severe drought; markets could change quickly
– ‘14 could look much different
Questions Going Forward
Growth in China Fiber Mill Use?
Million Bales
250
Cotton
Manmade Fiber
200
150
China’s
5-Year
Plan
100
50
0
90
93
96
99
02
05
08
11
14
17
Shifts in Cotton Mill Use?
Million Bales
100
China
90
Rest of World
80
70
60
50
40
30
20
10
0
90
93
96
99
02
05
08
11
14
17
Markets for U.S. Cotton?
100%
90%
Others
80%
70%
Turkey
60%
Mexico
50%
40%
China
30%
20%
U.S. Mills
10%
0%
1998-02
2003-07
2008-12
2013-17