1. The Economic Outlook For U.S. Cotton 2019
Prepared By Economic Services
Jody Campiche Shawn Boyd Michelle Huffman

2. 2018 – Year in Review
Uncertainty in the global economy and the world cotton market due to the U.S.-China trade tensions
Slowdown in U.S., China, and world economies
Lower U.S. and world production
Further reduction in Chinese stocks

3. 2018 U.S. Cotton Production 2017 2018 Change Southeast 4,592 4,265
-327
Mid-South
4,311
4,605
+294
Southwest
10,487
7,992
-2,495
West
833
734
-99
All Upland
20,223
17,596
-2,627
ALL ELS
700
794
+94
All Cotton
20,923
18,390
-2,533

4. U.S. Balance Sheet 17/18 18/19 Change Production 20.92 18.39 -2.53
Million Bales
17/18
18/19
Change
Production
20.92
18.39
-2.53
Mill Use
3.23
3.20
-0.03
Exports
15.85
15.00
-0.85
Stocks
4.30
Stocks/Use
22.5%
23.6%
+1.1%

5. NCC Acreage Survey Distributed on Dec 15
Responses collected through mid-January
Asked for acres of upland cotton, ELS cotton, corn, soybeans, wheat, other crops in ‘18 and intentions for ’19

6. Pre-Planting Market Signals
Cotton
Corn
Soybeans
Cot/Corn
Cot/Soy
2019
74.28¢
$4.00
$9.46
18.6
7.9
2018
76.27¢
$3.95
$10.15
19.3
7.5
2017
73.53¢
$3.91
$10.08
18.8
7.3
2016
59.68¢
$3.84
$8.92
15.5
6.7
2015
65.00¢
$4.13
$9.72
15.7
2014
78.57¢
$4.66
$11.44
16.9
6.9
2019: avg Nov 19’/Dec 19’ futures 12/15/18 – 01/15/19, : avg Jan-Mar Nov/Dec contract price

7. Pre-Planting Market Signals

8. U.S. Drought Monitor
February 6, 2018
February 5, 2019

9. 2019 Southeast Acreage 2018 Actual 2019 Intended % Change Alabama 510
507
-0.6%
Florida
118
111
-6.1%
Georgia
1,430
1,379
-3.6%
North Carolina
430
0.1%
South Carolina
300
284
-5.4%
Virginia 98
101
3.5%
Southeast
2,886
2,812
-2.6%
Total may not add due to rounding.

10. 2019 Mid-South Acreage 2018 Actual 2019 Intended % Change Arkansas 485
555
14.4%
Louisiana
195
238
22.2%
Mississippi
620
734
18.4%
Missouri
325
347
6.9%
Tennessee
360
381
5.9%
Mid-South
1,985
2,256
13.6%
Total may not add due to rounding.

11. 2019 Southwest Acreage 2018 Actual Intended % Change Kansas 165 171
3.4%
Oklahoma
780
788
1.0%
Texas
7,700
7,874
2.3%
Southwest
8,645
8,833
2.2%
Total may not add due to rounding.

12. 2019 West Acreage 2018 Actual 2019 Intended % Change Arizona 150 151
1.0%
California 50 57
14.4%
New Mexico 78
-0.6%
West
278
286
2.9%
Total may not add due to rounding.

13. 2019 ELS Acreage 2018 Actual 2019 Intended % Change Arizona 14 11
-19.9%
California
210
230
9.7%
New Mexico 7
-1.4%
Texas 17 15
-10.0%
ALL ELS
248
264
6.3%
Total may not add due to rounding.

14. 2019 U.S. Cotton Acreage 2018 2019 % Actual Intended Change Southeast
2,886
2,812
-2.6%
Mid-South
1,985
2,256
13.6%
Southwest
8,645
8,833
2.2%
West
278
286
2.9%
All Upland
13,794
14,186
2.8%
ALL ELS
248
264
6.3%
All Cotton
14,042
14,450

15. U.S. Cotton Production 17/18 18/19 19/20 Change Planted (Mil Ac) 12.7
14.1
14.5
+0.4
% Un-harvested
12.7%
25.3%
10.1%
-15.2%
Harvested (Mil Ac)
11.1
10.5
13.0
+2.5
Yield
905
838
840 +2
Production (Mil Ba)
20.9
18.4
22.7
+4.3

16. U.S. Cottonseed Production
Million tons

17. U.S. Balance Sheet 17/18 18/19 19/20 Change Production 20.92 18.39
Million Bales
17/18
18/19
19/20
Change
Production
20.92
18.39
22.72
+4.33
Mill Use
3.23
3.20
Exports
15.85
15.00
Stocks
4.30
Stocks/Use
22.5%
23.6%

18. Net Domestic Fiber Consumption

19. Cotton Product Imports to US Market (% SME)
2008
2018

20. U.S. Cotton Mill Use

21. U.S. Balance Sheet 17/18 18/19 19/20 Change Production 20.92 18.39
Million Bales
17/18
18/19
19/20
Change
Production
20.92
18.39
22.72
+4.33
Mill Use
3.23
3.20
3.25
+0.05
Exports
15.85
15.00
Stocks
4.30
Stocks/Use
22.5%
23.6%

22. U.S. Export Customers Thousand Bales As of Dec 27 2019 17/18 Shipments
Share
18/19
Commitments
Vietnam
3,086
19%
2,606
23%
China
2,526
16%
1,720
15%
Mexico
912 6%
1,071 9%
Indonesia
1,503
1,044
Pakistan
1,391
909 8%
Bangladesh
831 5%
875
Turkey
1,841
12%
535
Thailand
631 4%
442
South Korea
591
414
India
748
347 3%
All Others
1,790
11%
1,408
Total
15,850
100%
11,371

23. China Balance Sheet 17/18 18/19 19/20 Change Production 27.5 26.2 -1.3
Million Bales
17/18
18/19
19/20
Change
Production
27.5
26.2
-1.3
Mill Use
41.0
40.5
41.4
+0.9
Imports
5.7
7.5
11.1
+3.6
Stocks
38.0
32.4
28.2
-4.2
Stocks/Use
92%
80%
68%
-12%

24. U.S. Balance Sheet 17/18 18/19 19/20 Change Production 20.92 18.39
Million Bales
17/18
18/19
19/20
Change
Production
20.92
18.39
22.72
+4.33
Mill Use
3.23
3.20
3.25
+0.05
Exports
15.85
15.00
17.45
+2.45
Stocks
4.30
6.10
+1.8
Stocks/Use
22.5%
23.6%
29.6%
+6.0%

25. World Production 17/18 18/19 19/20 Change India 29.0 27.0 28.0 +1.0
Million Bales
17/18
18/19
19/20
Change
India
29.0
27.0
28.0
+1.0
China
27.5
26.6
-0.9
U.S.
20.9
18.4
22.7
+4.3
Pakistan
8.2
7.5
7.9
+0.4
Brazil
9.2
11.4
12.0
+0.6
Australia
4.7
2.6
4.2
+1.6

26. World Consumption 17/18 18/19 19/20 Change China 41.0 40.5 41.4 +0.9
Million Bales
17/18
18/19
19/20
Change
China
41.0
40.5
41.4
+0.9
India
24.1
24.8
25.5
+0.7
Pakistan
10.8
10.6
10.7
+0.1
Bangladesh
7.5
8.0
8.3
+0.3
Vietnam
6.6
7.7
+0.2
Turkey
7.4
6.8
6.9

27. World Balance Sheet 17/18 18/19 19/20 Change Production 123.7 118.5
Million Bales
17/18
18/19
19/20
Change
Production
123.7
118.5
125.5
+7.0
Mill Use
122.6
123.6
126.5
+2.89
Trade
40.9
42.3
45.9
+3.6
Stocks
81.0
75.5
74.2
-1.3
China
38.0
32.4
28.2
-4.2
All Others
43.0
43.1
46.0
+2.9

28. Cotton Prices

29. Final Thoughts U.S.-China trade dispute remains a key uncertainty
2019 projections based on assumption of trade resolution
If a resolution is not reached
U.S. exports would be lower
China mill use would likely be lower
U.S. ending stocks would be higher

30. Producers
Cooperatives
Ginners
Cottonseed
Merchants
Warehouses
Manufacturers