COTTON AND WOOL OUTLOOK                                         June 13, 1996
            Approved by the World Agricultural Outlook Board
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COTTON AND WOOL OUTLOOK is published monthly (except January) by the Economic
Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. 
CWS--0596.  
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Average Start for U.S. Cotton Crop
 
The 1996 U.S. cotton crop is off to an average start, and in some areas, a
less than ideal start.  Nationally, cotton plantings were 86 percent complete
as of June 9.  This compares with 88 percent a year ago and a 5-year average
of 90 percent.  Most States had completed or nearly completed planting with
the exceptions of Texas and Oklahoma, where moisture has been very sparse this
year.  Between January 1 and June 1, precipitation in Texas has ranged from 10
percent of normal in Brownsville to 75 percent of normal in Abilene.  In
Oklahoma, precipitation is about 50 percent of normal.  Due to this lack of
moisture, cotton plantings in Texas were 67 percent complete, compared with
the 5-year average of 80 percent.  However, Oklahoma was 74 percent planted
versus an average of 75 percent.
 
In addition, crop conditions as of early June are similar to those of a year
ago.  While 13 percent of the crop is rated "poor" or "very poor," compared
with 12 percent in 1995, a larger percentage (57 percent versus 53 percent) is
rated "good" or "excellent" this year.  All States, with the exception of
Texas, are doing as well or better than in 1995.  For Texas, where wind and
hail have damaged some acreage, 30 percent of the crop is rated "poor" or
"very poor;" this compares with 21 percent in 1995.  On the other hand, only
27 percent of the Texas crop is in "good" or "excellent" condition, contrasted
with 48 percent a year ago.
 
With all the uncertainties surrounding cotton planted area this year, most
would agree, however, that cotton acreage will decline from the Prospective
Plantings report as high grain prices attracted area from cotton.  A clearer
picture should emerge on June 28 when USDA releases its survey based on actual
plantings.  Meanwhile, the current USDA cotton production projection for 1996
remains at 19 million bales.  Although U.S. mill use is projected to rise to
11 million bales in 1996/97, exports are expected to decline to 6.8 million. 
With projected production rising above total demand and the expectation of
300,000 bales of raw cotton imports, stocks during 1996/97 are likely to rise
significantly.  Based on the current 1996/97 supply and demand projections,
stocks would rise 1.5 million bales to 4.2 million, indicating a stocks-to-use
ratio of about 24 percent.
 
China's 1995/96 Production and Stocks Higher
 
Foreign production for 1995/96 was raised 1.6 million bales in June to an
estimated 72.1 million.  With little change in 1995/96 consumption or trade,
the estimate for ending stocks rose by a similar amount, to 30.6 million
bales.  Foreign ending stocks in 1995/96 are now forecast 4.5 million bales
above beginning stocks, with China accounting for virtually all of the
increase.
 
China also accounted for virtually all of this month's increase in 1995/96
foreign production.  China's State Statistical Bureau (SSB) recently published
its latest update of China's 1995/96 cotton crop, 21.9 million bales.  Better
crops than the year before in Henan, Hubei, Xinjiang, and Jiangsu more than
offset losses in Shandong and Jiangxi.
 
The 1996/97 outlook for foreign cotton was virtually unchanged this month,
awaiting July's first comprehensive, country-by-country forecasts by USDA. 
Production is forecast at 71 million bales, consumption at 77 million, and
exports at 20.2 million.  Foreign ending stocks are forecast to reach 30.8
million bales, an increase from May's forecast due to higher beginning stocks.
 
U.S. Mill Consumption Remains Strong
 
April cotton mill consumption continued strong, albeit below March's dramatic
recovery.  Based on the latest U.S. Commerce Department data, U.S. cotton mill
use averaged a seasonally adjusted 40,700 480-pound bales per day in April,
compared with 41,100 bales in March.  During April 1995, the daily rate
totaled 43,100 bales.  On a seasonally adjusted annual rate (SAAR) basis,
April consumption declined 100,000 bales from March's rate to over 10.6
million bales.  So far this season, the SAAR has averaged about 10.5 million
bales.  
 
Cotton mill use during the first 9 months of 1995/96 reached nearly 7.9
million bales, compared with 8.5 million for the corresponding period a year
ago.  To reach the current estimate of 10.5 million bales, cotton mill use
needs to average 39,500 bales per day for the remaining 3 months.
 
Manmade fiber consumption declined in April to 121 million pounds, 1 percent
below a month earlier and 5 percent below April 1995.  The majority of the
decrease from a year ago occurred in noncellulosic staple consumption.  Since
August 1, total manmade consumption on the cotton system reached 1.1 billion
pounds, about 14 percent below a year ago.  In addition, cotton's share of
fiber use rose to 78.6 percent in April, the highest since November 1995.  So
far this season, cotton's share averaged 78.2 percent, compared with 1994/95's
77 percent.  
 
Cotton Prices Decline
 
U.S. cotton prices moved lower in May.  The average price received by upland
producers averaged 78.8 cents per pound, down from April's revised 79.6 cents. 
Similarly, spot prices for both upland and ELS cotton declined.  The spot
price for base-quality upland fell to about 83 cents per pound, while the ELS
spot price was near $1.54.
 
Mill-delivered upland prices also decreased from April to about 90 cents per
pound.  However, polyester staple prices declined further, increasing its
competitiveness with cotton.  In May, polyester staple prices averaged 80
cents per pound, a 4-cent decline in each of the last 2 months.  Meanwhile,
the cotton/polyester price ratio increased to 1.21 in May, but remains below
May 1995 when the ratio equalled 1.41.
 
New crop cotton prices have declined in recent weeks. In May, the December
1996 futures averaged nearly 82 cents per pound, but during the first part of
June, these prices returned to the 78-cent area, as west Texas received some
much needed precipitation.
 
Textile Exports Continue To Rise
 
Preliminary textile trade data indicate exports increased for the third
consecutive month in March, totaling 285 million pounds (raw-fiber
equivalent), 4 percent above a year earlier.  Textile exports were higher in
all major fibers and all end-use categories.  Apparel exports, at 124 million
pounds, accounted for 43 percent of total March exports and were 13 percent
above March 1995.  Manmade textile shipments represented 48 percent of the
total and cotton, 44 percent.
 
Textile imports declined for the third consecutive month to 534 million
pounds, down 5 percent from February.  Lower shipments of cotton, silk, wool,
and manmade fibers more than offset a slight increase in linen imports.  A
drop in apparel shipments accounted for most of the decline in imports. 
Cotton imports, at 288 million pounds, accounted for 54 percent of all textile
shipments.
 
Overall, the March textile trade deficit was 249 million pounds, with cotton
accounting for 65 percent of the total (162 million pounds).  The March
deficit declined 34 percent from a year earlier when it totaled 379 million
pounds.  In addition, the deficit for the first 3 months of 1996 was 928
million pounds, compared with 1.19 million a year ago.  Weaker textile
imports, primarily of manmade fiber, and stronger cotton and manmade textile
exports have lowered the trade deficit this year.
 
U.S. Wool Production and Consumption Continue Decline
 
In 1995, wool production continued its long-term downward trend, while mill
consumption was the lowest since 1990.  Revised 1995 estimates indicated raw
wool consumption totaled 142 million pounds (clean), 7 percent below 1994. 
Consumption on the woolen and worsted systems fell by about 7 percent and
carpet mill use was down 14 percent from a year ago.
 
Domestic raw wool production of 34 million pounds (clean) accounted for about
24 percent of mill use in 1995.  However, with lower mill use last year, raw
wool imports also declined 3 percent below 1994 to 89 million pounds. 
Carryover supplies declined 5 million pounds to 47 million, representing about
32 percent of total use.
 
Slight declines in wool production and consumption are forecast this season. 
Wool production is projected at 30 million pounds, while use is expected to
stabilize near 140 million pounds.  Raw wool imports, at 85 million pounds,
will likely increase the share of foreign production consumed by U.S. textile
mills.
 
Sheep and Wool Research and Promotion Order Suspended
 
On May 17, 1996, the U.S. Department of Agriculture announced it will suspend
the Sheep and Wool Promotion, Research, Education, and Information Order,
which became effective May 3.  All scheduled order actions, including the
collection of assessments, which were to begin July 1 will be affected.  The
order's suspension is the result of a review of voting procedures which
confirmed that rules were applied differently and inconsistently by official
polling places during the February 6 referendum.  The review was carried out
in response to voter complaints about perceived inconsistencies.
 
A second referendum will be scheduled, and eligible voters--sheep producers,
sheep feeders, and importers of sheep and sheep products--will have another
opportunity to vote on the order.  For the order to become effective, it must
be approved by a majority of voters or by voters who account for two-thirds of
the production represented in the referendum.  The program, which was
authorized by the 1994 Sheep Promotion, Research, and Information Act, would
be funded by mandatory assessments on domestic sheep producers and feeders and
on importers of sheep and sheep products.  The assessments would be used to
develop a program to strengthen the position of sheep and sheep products in
the marketplace.
 
The next Cotton and Wool Outlook (CWS-0696) will be released on July 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
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                                                   1995/96
                                         ----------------------------
Item                          1994/95     Apr        May         Jun
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Upland:                                      Million acres
  Planted                      13.55     16.72      16.72       16.72
    Program                    11.62     11.02      11.02       11.02
  Harvested                    13.16     15.78      15.80       15.80
                                                Pounds
  Yield/harvested acre           705       536        533         533
                                        Million 480-lb. bales
  Beginning stocks              3.30      2.59       2.59        2.59
  Production                   19.32     17.56      17.53       17.53
    Total supply 1/            22.65     20.44      20.41       20.42
  Mill use                     11.10     10.31      10.41       10.40
  Exports                       8.98      7.29       7.39        7.40
    Total use                  20.07     17.59      17.79       17.80
  Ending stocks                 2.59      2.87       2.67        2.67
                                               Percent
  Stocks-to-use ratio           12.9      16.3       15.0        15.0
 
Extra-long staple:                           1,000 acres
  Planted                        169       215        215         215
    Program                       84        26         26          26
  Harvested                      166       211        211         211
                                             Pounds
  Yield/harvested acre           974       821        836         836
                                         1,000 480-lb. bales
  Beginning stocks               227        59         59          59
  Production                     338       367        368         368
    Total supply 1/              567       436        437         432
  Mill use                       102        95         95         105
  Exports                        424       315        315         300
    Total use                    526       410        410         405
  Ending stocks                   59        26         27          27
                                               Percent
  Stocks-to-use ratio           11.2       6.3        6.6         6.7
----------------------------------------------------------------------
Based on USDA estimates.  1/ Includes imports.
 
WORLD COTTON SUPPLY AND USE ESTIMATES
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                                                   1995/96
                                        ------------------------------
Item                          1994/95     Apr        May         Jun
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Supply:                                 Million 480-lb. bales
Beginning stocks
  World                        26.30     28.87      28.91       28.77
  Foreign                      22.77     26.22      26.26       26.12
Production
  World                        85.61     89.83      88.41       89.98
  Foreign                      65.95     70.90      70.51       72.08
Imports
  World                        30.51     28.57      28.59       28.42
  Foreign                      30.49     28.27      28.29       28.12
Use:
Mill use
  World                        84.69     85.78      85.62       85.50
  Foreign                      73.50     75.38      75.12       75.00
Exports
  World                        28.77     28.51      28.39       28.18
  Foreign                      19.37     20.91      20.69       20.48
Ending stocks
  World                        28.77     31.79      31.73       33.34
  Foreign                      26.12     28.89      28.03       30.64
 
Stocks-to-use ratio                            Percent
  World                         34.0      37.1       37.1        39.0
  Foreign                       35.5      38.3       38.6        40.9
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Based on USDA estimates.
 
FIBER SUPPLY
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                                          1996                   1995
                               --------------------------
Item                             Feb       Mar        Apr         Apr
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Cotton:                                  1,000 480-lb. bales
  Ginnings                        21         0          0           0
Imports since August 1          12.8      28.3         NA        12.4
  Stocks, beginning           11,088     8,962      7,297       8,640
    At mills                     638       650        641         736
    Public storage             8,597     6,916      5,575       6,258
    CCC stocks                 2,142     1,899      1,501       1,318
 
Manmade:                                   Million pounds
  Production                   768.3     814.9      785.6       847.3
    Noncellulosic              731.1     773.1      745.5       803.2
    Cellulosic                  37.2      41.8       40.1        44.1
    Total since January 1    1,568.2   2,373.3    3,158.9     3,365.1
 
                                          1996                   1995
                               ---------------------------
                                Jan        Feb        Mar         Mar
----------------------------------------------------------------------
                                            Million pounds
  Raw fiber imports             83.2      80.5       92.3       103.3
    Noncellulosic               78.1      75.3       85.5        96.7
    Cellulosic                   5.1       5.2        6.8         6.6
    Total since January 1       83.2     163.7      256.0       287.3
 
Wool and Mohair:                            1,000 pounds
  Raw wool imports, clean      9,624     9,114      8,728      10,772
    48's-and-finer             7,248     5,891      6,162       7,929
    Not-finer-than-46's        2,376     3,223      2,566       2,843
    Total since January 1      9,624    18,737     27,465      28,935
 
  Wool top imports               629       170        103         605
    Total since January 1        629       799        902       1,556
  Mohair imports, clean            2         1         NA           7
    Total since January 1          2         3          3          10
----------------------------------------------------------------------
NA = Not available.
 
COTTON SYSTEM FIBER CONSUMPTION
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                                          1996                   1995
                              ---------------------------
Item                             Feb       Mar        Apr         Apr
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
All consumed by mills 1/         861       902        921         879
  Total since August 1 1/      6,069     6,971      7,892       8,540
  SA annual rate 2/           10,315    10,758     10,669      11,254
  SA daily rate 2/              39.4      41.1       40.7        43.1
  Daily rate                    41.0      42.9       41.8        43.9
 
Upland consumed by mills 1/      851       890        904         869
  Total since August 1 1/      6,006     6,895      7,799       8,465
  SA annual rate 2/           10,191    10,614     10,471      11,131
  SA daily rate 2/              38.9      40.5       40.0        42.6
  Daily rate                    40.5      42.4       41.1        43.5
 
Spindles in place              6,433     6,417      6,378       7,238
  Active spindles              5,957     5,947      5,807       6,741
    100 percent cotton         2,678     2,677      2,845       2,954
    100 percent manmade        1,003     1,039      1,047       1,110
    Blends                     2,276     2,231      2,115       2,677
                                             Percent
Cotton's share of fibers        78.0      78.0       78.6        76.8
 
Manmade:                                    1,000 pounds
Total consumed by mills 1/   116,440   121,817    120,509     127,269
  Total since August 1 1/    811,452   933,268  1,053,778   1,219,676
  Daily rate                   5,545     5,801      5,478       6,363
    Noncellulosic staple       4,690     4,876      4,676       5,473
    Cellulosic staple            855       925        802         890
----------------------------------------------------------------------
1/ Adjusted to calendar month.  2/ SA = seasonally adjusted.
 
FIBER EXPORTS
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                                         1996                     1995
                               --------------------------
Item                             Jan      Feb         Mar          Mar
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Upland exports               1,204     1,257        739       1,310
    Total since August 1       4,085     5,342      6,081       6,646
  Sales for next season           87        28         96         217
    Total since August 1         253       281        377       3,104
 
  ELS exports                   58.6      37.9       38.7        81.9
    Total since August 1       152.4     190.3      229.0       255.7
  Sales for next season         17.4      18.4       25.7        75.4
    Total since August 1        95.6     113.9      139.7       133.9
 
Manmade:                                   Million pounds
  Raw fiber exports             75.2      96.7       97.5        95.3
    Noncellulosic               70.9      92.8       91.5        87.8
    Cellulosic                   4.3       3.9        6.0         7.5
    Total since January 1       75.2     171.9      269.4       247.4
 
Wool and Mohair:                           1,000 pounds
  Raw wool exports, clean      336.5     183.4      440.5       423.7
   Total since January 1       336.5     519.9      960.3       966.5
  Wool top exports             822.2   1,147.9      842.0       888.9
    Total since January 1      822.2   1,970.1    2,812.1     2.707.5
 
  Mohair exports, clean      1,236.8     206.8      323.9       289.4
    Total since January 1    1,236.8   1,443.6    1,767.5     1,773.8
----------------------------------------------------------------------
 
FIBER PRICES
----------------------------------------------------------------------
                                          1996                   1995
                              -----------------------------
Item                            Mar       Apr        May         May
----------------------------------------------------------------------
Domestic cotton prices:                    Cents per pound
  Adjusted World Price         68.26     68.53      69.87       87.04
  Jul'96 futures               84.75     86.12      82.89       82.73
  Dec'96 futures               79.88     81.19      81.86          NA
  Upland spot 41-34            81.13     84.69      83.22      105.38
  Pima spot 03-46             162.11    163.46     154.35      127.77
  Avg. price received by:
    Upland producers           77.20     79.60      78.80       82.60
 
  Mill delivered:
    Cotton
      Actual                   88.79     92.10      90.39      113.94
      Raw fiber equivalent     98.66    102.33     100.43      126.60
    Rayon staple
      Actual                  125.00    120.00     120.00      119.00
      Raw fiber equivalent    130.21    125.00     125.00      123.96
    Polyester staple
      Actual                   88.00     84.00      80.00       86.00
      Raw fiber equivalent     91.67     87.50      83.33       89.58
 
    Price ratios                               Percent
      Cotton/rayon              75.8      81.9       80.3       102.1
      Cotton/polyester         107.6     117.0      120.5       141.3
 
Northern Europe cotton quotes:            Cents per pound
  A Index                      83.18     82.90      83.23      115.13
  Memphis Territory            94.13     96.69      95.60      121.75
  California/Arizona           98.31    100.13      98.50      124.17
  B Index                      77.76     77.53      77.71      108.96
  Orleans/Texas                89.88     91.06      89.00      116.13
 
Wool prices (clean):                      Dollars per pound
 U.S. 56's                      1.35      1.35       1.35        1.88
  Australian 56's 1/            1.90      1.83       1.84        2.51
 U.S. 60's                      1.57      1.57       1.56        2.29
  Australian 60's 1/            2.03      1.97       1.95        2.71
 U.S. 64's                      1.97      1.97       1.95        2.95
  Australian 64's 1/            2.38      2.34       2.42        3.07
----------------------------------------------------------------------
NA = Not available.
1/ In bond, Charleston, SC.
 
TEXTILE TRADE
----------------------------------------------------------------------
                                         1996                    1995
                            -----------------------------
Item                            Jan       Feb         Mar         Mar
----------------------------------------------------------------------
Imports:                                   1,000 pounds 1/
 
  Yarn, thread, and fabric   165,841   139,967    146,106     205,476
    Cotton                    65,330    61,012     57,646      81,711
    Linen                     35,821    22,606     26,665      47,675
    Wool                       3,002     3,000      3,372       3,787
    Silk                         708       556        644         685
    Manmade                   60,980    52,792     57,779      71,618
 
  Apparel                    389,768   372,675    339,157     381,936
    Cotton                   226,847   221,484    203,188     224,816
    Linen                     12,753     9,925      7,562      10,858
    Wool                      11,170    11,058     10,236      10,880
    Silk                      12,506     9,888      8,795      10,936
    Manmade                  126,492   120,320    109,376     124,446
 
  House furnishings           31,545    27,596     28,427      32,114
    Cotton                    22,892    20,749     20,966      23,439
    Linen                        154       178        135         269
    Wool                         127        99         86         147
    Silk                          10        29         28          20
    Manmade                    8,362     6,541      7,213       8,238
 
  Floor covering              16,729    15,041     14,602      25,402
    Cotton                     4,177     3,518      3,184       4,459
    Linen                      2,746     2,228      2,136       3,034
    Wool                       4,432     3,791      3,172       9,253
    Silk                         479       335        230         437
    Manmade                    4,896     5,169      5,880       8,219
 
  Total imports 2/           611,224   562,291    533,687     652,042
    Cotton                   323,250   310,967    287,881     338,263
    Linen                     51,509    34,957     36,534      61,940
    Wool                      18,790    17,983     16,915      24,239
    Silk                      13,704    10,812      9,701      12,078
    Manmade                  203,972   187,571    182,656     215,522
 
Exports:                                  1,000 pounds 1/
 
  Yarn, thread, and fabric   105,961   116,595    123,971     130,267
    Cotton                    38,190    41,978     45,675      44,774
    Linen                      2,734     3,321      3,166       3,194
    Wool                       2,572     2,777      3,169       3,388
    Silk                       1,296     1,314      1,319       1,509
    Manmade                   61,170    67,205     70,642      77,402
 
  Apparel                    105,420   104,565    123,585     109,166
    Cotton                    61,697    62,252     72,932      68,573
    Linen                      1,813     2,117      2,618       2,164
    Wool                       4,801     4,597      6,168       4,079
    Silk                       1,769     1,757      2,014       1,919
    Manmade                   35,340    33,842     39,852      21,431
 
  House furnishings            4,781     5,327      6,140       6,124
    Cotton                     2,838     3,172      3,965       3,677
    Linen                        174       270        257         284
    Wool                          65       105         56          44
    Silk                          11       151         59         165
    Manmade                    1,592     1,629      1,802       1,954
 
  Floor covering              25,181    25,649     30,657      27,136
    Cotton                     2,250     2,754      3,138       3,288
    Linen                      1,053     1,072      1,273       1,136
    Wool                       1,340     1,793      1,727       1,540
    Silk 3/                      ---       ---        ---         ---
    Manmade                   20,538    20,030     24,519      21,173
 
  Total exports 2/           241,613   252,615    284,847     273,022
    Cotton                   105,019   110,214    125,791     120,363
    Linen                      5,782     6,793      7,331       6,789
    Wool                       8,796     9,296     11,156       9,073
    Silk                       3,176     3,222      3,392       3,593
    Manmade                  118,841   123,090    137,178     133,204
----------------------------------------------------------------------
1/ Raw fiber equivalent.  1996 data are subject to revision.
2/ Includes headgear.  3/ Absence of trade.
 
                                   END-END-END