COTTON AND WOOL OUTLOOK                                       August 13, 1997 
            Approved by the World Agricultural Outlook Board
-----------------------------------------------------------------------------
COTTON AND WOOL OUTLOOK is issued electronically 11 months a year
(no January issue) by the Economic Research Service, U.S. Department 
of Agriculture, Washington, DC 20005-4788.  No printed copies available.  
CWS-0797.
-----------------------------------------------------------------------------

U.S. Production Lowered for 1997/98

Based on this season's initial USDA survey, 1997 U.S. cotton production is
forecast at 17.78 million bales, 1 percent below July's projection and 6
percent below 1996.  Upland production is forecast at 17.23 million bales
while the extra-long staple (ELS) crop is projected at 554,000.  During the
past 10 years, the August forecast has been below final production 6 times and
above 4 times.  Past differences between the August forecast and the final
production estimate indicate that chances are two out of three that the 1997
cotton crop will range between 16.3 and 19.3 million bales.

Compared with 1996, upland production is expected to decline in each region
except the Southwest, where above average rainfall this spring helped the
crop's development and progress.  In the Southwest, where abandonment is
forecast at a relatively low 5 percent, production is projected to improve 16
percent above 1996 to 5.2 million bales, the highest since 1993.  In the
Delta, however, cotton production is estimated at 4.7 million bales, 22
percent below 1996 and the lowest since 1993.  Meanwhile, the Southeast is
forecast to produce 4.2 million bales.  Although 9 percent below last season,
it remains one of the largest crops on record there.  In the West, lower area
has led to a 3.1-million-bale estimate, which is 5 percent beneath 1996 and
the smallest since 1986.  In contrast to upland, ELS production is forecast 5
percent above 1996, with over 80 percent of the ELS crop produced in
California.

Although total area planted to cotton (13.9 million acres) was 95,000 acres
below the June Acreage report, a projected lower-than-average abandonment
places the harvested area estimate at 13.4 million acres, which is 4 percent
above 1996.  Based on this harvested area, the national yield is placed at
only 637 pounds per acre, 70 pounds below last season but near the 5-year
average.

While the U.S. crop progress and condition have improved recently, both are
lagging last season.  As of August 10, 88 percent of the area was setting
bolls, compared with 94 percent in 1996.  Likewise, only 7 percent of the area
had bolls opening, compared with 11 percent last year.  In both cases,
however, 1997 is near the 5-year average.  Similarly, 59 percent of the crop
area was in "good" or "excellent" condition, compared with 61 percent in 1996. 
Additional indications of the lateness of the crop are ginnings prior to
August 1. This season, only 2,200 bales were ginned by August 1.  This
compares with more than 48,000 bales in 1996 and nearly 17,000 bales in 1995.

Based on the August production forecast and carryin stocks of 4.1 million
bales, total supply for the 1997/98 marketing year is projected at 21.9
million bales, almost identical to the previous season.  Total use, however,
is estimated to increase 1.5 percent to 18.1 million bales.  Cotton mill use
and exports for 1997/98 were left unchanged from last month; both are
projected slightly above their respective 1996/97 levels.  U.S. mill use is
estimated at 11 million bales, while exports are forecast at 7.1 million.  The
higher shipments, represent a slightly reduced share of world trade.  However,
the share is expected to remain between 25 and 26 percent.  With these supply
and demand estimates, U.S. ending stocks for 1997/98 are projected to fall
300,000 bales from the beginning level to 3.8 million. Thus, the implied
stocks-to-use ratio would decline slightly to 21 percent from 23 percent in
1996/97.

India Leads Foreign Supply and Demand Changes in August

The largest changes in the 1997/98 foreign cotton supply and demand came in
production and ending stocks this month.  Foreign production was estimated
650,000 bales higher than in July, at 69.6 million, while projected 1997/98
foreign ending stocks rose 860,000 bales to 32.1 million.  The forecast for
foreign consumption was also raised slightly (380,000 bales) to 77.5 million. 
India accounted for at least half of the total increase in each case.

Expected 1997/98 cotton area in India was raised 200,000 hectares (ha) to 9
million following a widespread reassessment of grower's response to last
year's declining cotton prices in India.  Favorable progress of the monsoon
may have also helped increase planted area, and raised yield prospects. 
India's 1997/98 crop is now forecast at 12.5 million bales, 500,000 bales
above the July forecast.

Uzbekistan's 1997/98 crop is now forecast at 5.8 million bales, 200,000 bales
above the July forecast.  Weather through late June is now seen to have been
particularly favorable for plant development.  Rains earlier in the season
necessitated a relatively large amount of replanting, but within normal
ranges.  During June, average maximum temperatures were slightly higher than
normal, and well above 1996's extraordinary lows.  While temperatures this
June equaled levels associated with Uzbekistan's highest yields of the last
decade, the forecast yield of 842 kg/ha is only the fourth highest of that
period.  With planted area much lower than the 1987/88-96/97 average, expected
production remains far below average.

Mexico's historical production estimates were revised to make USDA data more
closely aligned with Mexico's official estimates, but all the production
changes preceded 1995/96.  On average, the new estimates were higher, and
estimated 1997/98 beginning stocks for Mexico were revised upward 130,000
bales.  Consumption and imports in 1997/98 were raised by 150,000 bales and 
300,000 bales, respectively, as evidence emerged of higher consumption and
imports in 1996/97 as well as in 1997/98.

Mill Use Unchanged

Despite a slight improvement in the June mill consumption report released by
the U.S. Commerce department, the 1996/97 estimate was left unchanged.  The
preliminary July estimate released later this month will provide 12 months of
data which will be used to adjust the estimate.  In June, mills used on
average a seasonally adjusted 42,000 480-pound bales per day, similar to the
previous 2 months.  On a seasonally adjusted annual rate basis, however, June
consumption improved from May to over 10.95 million bales.  Actual cotton mill
use during the first 11 months of 1996/97 approached 10 million bales,
compared with 9.8 million for the same period a year earlier.  Based on the
recent mill consumption report, the 1996/97 mill use may be marginally above
the current 10.85-million-bale estimate.

Cotton Prices Up Slightly in July

The average price received by upland producers for the first half of July rose
to 68.1 cents per pound from the revised June price of 66.8 cents.  During
July 1996, the average price was 73.6 cents.  While upland spot prices rose
about a penny in July to 71.8 cents per pound, the ELS spot price increased
2.5 cents to nearly $1.11 per pound.

Upland mill-delivered cotton prices were also higher in July, while manmade
fiber prices remained steady.  Cotton prices averaged 78.5 cents per pound in
July, the highest since last December.  On the other hand, polyester staple
prices are unchanged at 68 cents per pound for the fourth month in a row.  As
cotton prices have risen recently, mill-delivered cotton has become less
competitive.  In fact, cotton's (price) competitive position with polyester in
July 1997 was the weakest in 2 years.

In addition, world cotton prices also rose in July.  The A Index averaged
nearly 81.5 cents per pound, up slightly from both the previous month and a
year earlier.  Similarly, the U.S. Northern Europe quotes averaged higher. 
However, for the 1996/97 season, the A Index averaged 7 cents below 1995/96 at
78.6 cents per pound, reflecting the rise in world stocks during the season.


                                    * * * 

The next Cotton and Wool Outlook (CWS-0897) will be released on September 15.

For further information, contact Leslie Meyer at (202) 501-8528 (U.S. Cotton),
Steve MacDonald at (202) 219-1179 (Foreign Cotton), or Robert Skinner at (202)
219-0767 (Textiles and Wool).


U.S. COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1997/98
                                         ----------------------------
Item                          1996/97     Jun        Jul          Aug
----------------------------------------------------------------------
Upland:                                      Million acres
  Planted                      14.38     14.24      13.75       13.66
  Harvested                    12.61     13.00      12.63       13.16
                                                Pounds
  Yield/harvested acre           701       665        665         628

                                        Million 480-lb. bales 
  Beginning stocks              2.54      3.91       4.01        4.07
  Production                   18.41     17.99      17.49       17.23
    Total supply 1/            21.36     21.93      21.52       21.32
  Mill use                     10.75     10.89      10.89       10.89
  Exports                       6.53      6.91       6.71        6.68
   Total use                   17.28     17.80      17.60       17.57
  Ending stocks                 4.07      4.09       3.89        3.74
                                               Percent
  Stocks-to-use ratio           23.6      23.0       22.1        21.3
  
Extra-long staple:                           1,000 acres
  Planted                        258       245        250         250
  Harvested                      256       243        247         249
                                                Pounds
  Yield/harvested acre           991     1,000        995       1,068

                                         1,000 480-lb. bales
  Beginning stocks                66        40         40          30
  Production                     529       506        512         554
    Total supply 1/              595       546        552         584
  Mill use                       105       110        110         110
  Exports                        470       390        390         425
    Total use                    575       500        500         535
  Ending stocks                   30        56         62          59
                                               Percent  
  Stocks-to-use ratio            5.2      11.2       12.4        11.0
----------------------------------------------------------------------
Based on USDA estimates.  1/ Includes imports.




WORLD COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1997/98
                                        ------------------------------
Item                          1996/97     Jun        Jul         Aug
----------------------------------------------------------------------
Supply:                                 Million 480-lb. bales
Beginning stocks
  World                        33.57     36.31      36.55       36.96
  Foreign                      30.96     32.36      32.50       32.86
Production
  World                        88.49     87.50      86.91       87.34
  Foreign                      69.55     69.00      68.91       69.56
Imports
  World                        28.38     27.50      27.84       28.18
  Foreign                      27.98     27.47      27.81       28.15
Use:
Mill use
  World                        86.58     88.50      88.11       88.49
  Foreign                      75.73     77.50      77.11       77.49
Exports
  World                        26.60     27.20      27.53       27.76
  Foreign                      19.60     19.90      20.43       20.66
Ending stocks
  World                        36.96     35.31      35.24       35.90
  Foreign                      32.86     31.16      31.29       32.10

Stocks-to-use ratio                            Percent
  World                         42.7      39.9       40.0        40.6
  Foreign                       43.4      40.2       40.6        41.4
---------------------------------------------------------------------
Based on USDA estimates.


FIBER SUPPLY
----------------------------------------------------------------------
                                          1997                   1996
                              ---------------------------
Item                            Apr        May        Jun         Jun
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Ginnings                         0         0          0           0
Imports since August 1         401.6     402.0         NA       205.1
  Stocks, beginning           10,353     8,689      7,098       4,492
    At mills                     695       698        702         660
    Public storage             7,876     6,409      5,138       3,513
    CCC stocks                 1,834     1,495      1,298         752

Manmade:                                   Million pounds
  Production                   921.0     823.0      814.0       828.7
    Noncellulosic              875.1     778.9      779.0       787.4
    Cellulosic                  45.9      44.1       35.0        41.3
    Total since January 1    3,495.5   4,318.5    5,132.5     4,580.3

                                         1997                    1996
                             -----------------------------
                                 Mar       Apr        May         May
----------------------------------------------------------------------
                                            Million pounds
  Raw fiber imports            113.0     107.5      110.3        93.7
   Noncellulosic               105.2     100.0      101.9        88.3
    Cellulosic                   7.8       7.5        8.4         5.4
    Total since January 1      341.5     449.0      559.3       440.8

Wool and Mohair:                            1,000 pounds
  Raw wool imports, clean      6,112     6,633      5,780       7,011
    48's-and-finer             3,331     4,608      3,852       5,232
    Not-finer-than-46's        2,781     2,026      1,928       1,779
    Total since January 1     21,581    28,215     33,995      40,163

  Wool top imports               249       167        163         429
    Total since January 1        401       568        731         830
  Mohair imports, clean            3         0          0           2
    Total since January 1          3         3          3           4
----------------------------------------------------------------------
NA = Not available.


COTTON SYSTEM FIBER CONSUMPTION
----------------------------------------------------------------------
                                          1997                   1996
                              ---------------------------
Item                             Apr       May       Jun          Jun
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
All consumed by mills 1/         955       959        895         860
  Total since August 1 1/      8,135     9,095      9,989       9,780
  SA annual rate 2/           10,975    10,924     10,958      11,105
  SA daily rate 2/              42.1      41.9       42.0        42.4
  Daily rate                    43.4      43.6       42.6        43.0

Upland consumed by mills 1/      945       950        888         851
  Total since August 1 1/      8,056     9,006      9,894       9,679
  SA annual rate 2/           10,859    10,814     10,865      10,984
  SA daily rate 2/              41.6      41.4       41.6        41.9
  Daily rate                    43.0      43.2       42.3        42.5

Spindles in place              5,699     5,593      5,560       6,272
  Active spindles              5,373     5,294      5,297       5,737
    100 percent cotton         2,546     2,570      2,580       2,674
    100 percent manmade          935       896        896       1,033
    Blends                     1,892     1,828      1,821       2,030
                                             Percent
Cotton's share of fibers        77.5      77.4       78.2        77.4

Manmade:                                    1,000 pounds
Total consumed by mills 1/   132,934   134,570    119,578     120,932
  Total since August 1 1/  1,118,548 1,253,118  1,372,696   1,309,367
  Daily rate                   6,042     6,117      5,694       6,047
    Noncellulosic staple       5,377     5,477      5,216       5,161
    Cellulosic staple            665       640        478         886
----------------------------------------------------------------------
1/ Adjusted to calendar month.  2/ SA = seasonally adjusted.


FIBER EXPORTS
----------------------------------------------------------------------
                                          1997                  1996
                               --------------------------
Item                             Mar       Apr       May         May
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Upland exports                 772       676        600         329
    Total since August 1       4,059     4,735      5,335       6,962
  Sales for next season          161       166        284          48
    Total since August 1         456       622        907         461
     
ELS exports                     75.7      35.0       31.1        13.2
    Total since August 1       359.0     394.0      425.1       266.6
  Sales for next season         30.8      18.6       25.6        10.5
    Total since August 1        53.9      72.5       98.2       162.2

Manmade:                                   Million pounds
  Raw fiber exports            104.5      96.3       98.8        93.0
    Noncellulosic               90.4      83.5       89.6        84.5
    Cellulosic                  14.1      12.8        9.2         8.5
    Total since January 1      301.5     397.8      496.6       451.1

Wool and Mohair:                           1,000 pounds
  Raw wool exports, clean      481.9     385.1    1,032.4       506.9
   Total since January 1       921.9   1,307.0    2,339.4       911.8
  Wool top exports             845.1     444.4      802.5       739.9
    Total since January 1    1,812.4   2,256.8    3,059.3     1,339.2
  Mohair exports, clean        223.6     146.4       64.5       130.0
    Total since January 1      446.3     592.7      657.3       344.2
----------------------------------------------------------------------

FIBER PRICES
----------------------------------------------------------------------
                                          1997                   1996
                               --------------------------
Item                             May      Jun         Jul         Jul
----------------------------------------------------------------------
Domestic cotton prices:                    Cents per pound
  Adjusted World Price         65.92     66.66      66.80       64.39
  Oct'97 futures               73.96     75.23      74.66       76.60
  Dec'97 futures               74.84     75.92      74.83       75.95
 Upland spot 41-34            69.30      71.03      71.83       76.84
  Pima spot 03-46             114.83    108.07     110.50      133.74
  Avg. price received by:
    Upland producers           68.10     66.80      68.10       73.60

  Mill delivered:
    Cotton
      Actual                   75.54     77.09      78.47       82.18
      Raw fiber equivalent     83.93     85.66      87.19       91.31
    Rayon staple
      Actual                  115.00    115.00     115.00      115.00
      Raw fiber equivalent    119.79    119.79     119.79      119.79
    Polyester staple
      Actual                   68.00     68.00      68.00       78.00
      Raw fiber equivalent     70.83     70.83      70.83       81.25

    Price ratios                               Percent
      Cotton/rayon              70.1      71.5       72.8        76.2
      Cotton/polyester         118.5     120.9      123.1       112.4

Northern Europe cotton quotes:            Cents per pound
  A Index                      79.38     80.84      81.47       79.68
  Memphis Territory            80.75     82.50      83.70          NQ
  California/Arizona           82.15     84.63      85.95       83.50
  B Index                      75.64     79.54      80.00       74.04
  Orleans/Texas                76.65     78.25      79.75       81.19

Wool prices (clean):                      Dollars per pound
 U.S. 56's                      1.47      1.50       1.50        1.30
  Australian 56's 1/            1.95      2.05         NQ        1.82
 U.S. 60's                      1.89      1.85       1.85        1.55
  Australian 60's 1/            2.09      2.18       2.10        1.94
 U.S. 64's                      2.48      2.55       2.55        1.92
  Australian 64's 1/            2.79      2.87         NQ        2.36
----------------------------------------------------------------------
NQ = No quotes.
1/ In bond, Charleston, SC.


TEXTILE TRADE
----------------------------------------------------------------------
                                         1997                   1996
                            -------------------------------
Item                            Mar       Apr         May        May
----------------------------------------------------------------------
Imports:                                   1,000 pounds 1/

  Yarn, thread, and fabric   200,932   209,167         NA     173,257
    Cotton                    71,723    89,822         NA      72,479
    Linen                     34,713    20,995         NA      22,557
    Wool                       4,503     5,295         NA       3,804
    Silk                         687       649         NA         709
    Manmade                   89,307    92,406         NA      73,709

  Apparel                    398,442   413,179         NA     380,229
    Cotton                   242,258   245,923         NA     225,891
    Linen                      8,237     8,435         NA       8,845
    Wool                      10,797    12,898         NA      13,788
    Silk                      10,163    11,810         NA       8,679
    Manmade                  126,988   134,113         NA     123,027

  House furnishings           30,912    34,168         NA      27,740
    Cotton                    23,490    25,146         NA      20,585
    Linen                        120       131         NA         152
    Wool                         105       144         NA          88
    Silk                          43        33         NA           8
    Manmade                    7,153     8,714         NA       6,907

  Floor covering              23,551    24,451         NA      21,444
    Cotton                     4,876     4,108         NA       2,888
    Linen                      2,826     2,916         NA       2,406
    Wool                       5,657     6,720         NA       6,253
    Silk                         413       348         NA         266
    Manmade                    9,779    10,358         NA       9,630

  Total imports 2/           659,455   687,867         NA     609,833
    Cotton                   346,311   368,579         NA     325,790
    Linen                     45,942    32,504         NA      34,002
    Wool                      21,105    25,130         NA      24,072
    Silk                      11,306    12,840         NA       9,663
    Manmade                  235,791   248,815         NA     216,305

Exports:                                 1,000 pounds 1/

  Yarn, thread, and fabric   130,603   133,208         NA     126,650
    Cotton                    42,232    41,560         NA      45,324
    Linen                      3,857     4,261         NA       3,482
    Wool                       4,379     4,111         NA       3,687
    Silk                       1,787     1,753         NA       1,455
    Manmade                   78,347    81,524         NA      72,703

  Apparel                    149,728   153,478         NA     137,203
    Cotton                    92,337    93,872         NA      84,450
    Linen                      2,668     2,556         NA       2,303
    Wool                       6,576     7,878         NA       6,788
    Silk                       2,525     3,197         NA       2,387
    Manmade                   45,622    45,976         NA      41,275

  House furnishings            7,594     5,913         NA       5,869
    Cotton                     4,491     3,464         NA       3,499
    Linen                        404       248         NA         275
    Wool                         150       121         NA         102
    Silk                         251       205         NA         160
    Manmade                    2,298     1,876         NA       1,832

  Floor covering              34,229    33,076         NA      29,986
    Cotton                     3,700     3,065         NA       3,347
    Linen                      1,450     1,384         NA       1,242
    Wool                       1,918     1,656         NA       1,504
    Silk 3/                      ---       ---         NA         ---
    Manmade                   27,161    26,970         NA      23,892

  Total exports 2/           322,575   326,070         NA     299,971
    Cotton                   142,833   142,021         NA     136,669
    Linen                      8,394     8,462         NA       7,312
    Wool                      13,052    13,791         NA      12,103
    Silk                      11,621    16,775         NA       4,001
    Manmade                  153,733   156,641         NA     139,886
----------------------------------------------------------------------
1/ Raw fiber equivalent.  Data for 1997 will be revised.
2/ Includes headgear.  3/ Absence of trade.




1997 ACREAGE, YIELD, AND PRODUCTION ESTIMATES
-------------------------------------------------------------------
State/
Region         Planted     Harvested        Yield      Production
-------------------------------------------------------------------
                                           Lbs./          1,000
                   1,000 acres         harvested acre     bales

Upland:
  Alabama         520          420           503            440
  Florida         100          100           720            150
  Georgia       1,440        1,435           736          2,200
  N. Carolina     690          688           590            845
  S. Carolina     290          285           758            450
  Virginia        100           99           601            124
    Southeast   3,140        3,027           667          4,209

  Arkansas        950          930           692          1,340
  Louisiana       590          585           673            820
  Mississippi     980          960           750          1,500
  Missouri        370          365           618            470
  Tennessee       510          500           566            590
    Delta       3,400        3,340           678          4,720

  Kansas           15           14           480             14
  Oklahoma        220          210           434            190
  Texas         5,600        5,300           453          5,000
    Southwest   5,835        5,524           452          5,204

  Arizona         330          329         1,167            800
  California      880          875         1,207          2,200
  New Mexico       70           66           698             96
    West        1,280        1,270         1,170          3,096

Total Upland   13,655       13,161           628        17,229

Pima:
  Arizona          20           20           792             33
  California      185          184         1,174            450
  New Mexico       13           13           665             18
  Texas            32           32           795             53

Total Pima        250          249         1,068            554

Total All      13,905       13,410           637         17,783
-------------------------------------------------------------------
Based on the August Crop Production report.

END_OF_FILE