COTTON AND WOOL                                              January 12, 1995
           Approved by the World Agricultural Outlook Board
-----------------------------------------------------------------------------
COTTON AND WOOL Outlook is published monthly by the Economic Research Service,
U.S. Department of Agriculture, Washington, DC 20005-4788.  CWS-0195.
-----------------------------------------------------------------------------

The 1994 Cotton Crop in Review

The 1994 U.S. cotton crop is forecast at a record 19.7 million bales.  Upland
production is estimated at 19.4 million bales and extra-long staple (ELS) is
projected at 342,000.  Last August the crop was expected to total 19.2
million, but improved weather conditions, primarily in the Delta and
Southeastern States, increased yields and the crop size.  The national average
yield is forecast at 710 pounds per harvested acre, 4 pounds above the record
set in 1987.  The acreage abandonment rate for the 1994 crop, at 3 percent, is
less than half of the average of the previous 5 years.

Upland production in the Southeast is currently forecast at 3.6 million bales,
up 18 percent from the August estimate.  Yield potential increased each month
during the season, raising the crop size.  Georgia's production, at 1.6
million bales, is up 19 percent from August and the largest crop on record. 
Similarly, North Carolina's crop is forecast at 820,000 bales, the largest
since 1951.

The Delta States are expected to produce 6.9 million bales, 8 percent above
the August estimate, and 48 percent above last season's crop.  Yields in the
Delta States improved throughout the season and are estimated at a record 815
pounds per harvested acre.  Arkansas is expected to produce 1.8 million bales,
61 percent above the 1993 crop and the largest since 1948.  Cotton production
in Louisiana is also up significantly at 1.5 million bales, the largest on
record.

In contrast, production forecasts show yields and production lower this season
in the Southwestern and Western States.  For the Southwest, production is
projected at 5.2 million bales, with yields averaging 458 pounds per harvested
acre.  In the West, the upland crop is expected to total 3.6 million bales
based on a yield of 1,179 pounds.

Lower yields and production forecasts have occurred as the season progressed
for the 1994 ELS crop.  Yields are expected to average 987 pounds per
harvested acre, down 3 percent from the initial estimate last August.  ELS
production, at 342,000 bales, is the smallest since 1988.

Ginning estimates this season indicate that 19.0 million bales had been ginned
prior to January 1, compared with 15.7 million in 1993.  Based on the current
production estimate, 96 percent of the crop had been ginned versus about 97
percent in 1993.  The final USDA 1994 upland and ELS cotton production
estimates will be released May 10.

Consumption Remains Strong

Cotton mill consumption remains strong according to the latest U.S. Commerce
Department data.  For the calendar month, preliminary November cotton mill use
totaled 940,200 bales, near that of October, but well above November 1993's
836,200 bales.  On a daily basis, cotton mill use fell from October's 44,500
bales to 42,700.  However, compared with a year ago, the daily average
exceeded November 1993's by 4,700 bales per day.  Cotton consumption during
the first 4 months of this season totaled 3.86 million bales, compared with
3.50 million a year ago.  On a seasonally adjusted annual rate, consumption
during the first 4 months of 1994/95 averaged 11 million bales, compared with
10.1 million last season.

Cotton's share of fibers used on the cotton system declined slightly in
November.  However, cotton's share has averaged nearly 77 percent this season,
the highest since 1967.  Cotton's share of fiber use in markets where it
competes with manmade fibers has increased each year since 1983.  Increasing
market share and strong demand for denim, apparel, and home furnishings are
expected to push mill use to 11 million bales in 1994/95, the highest since
1942.

U.S. Textile Exports Rise

U.S. textile imports in October totaled 683 million pounds (raw fiber
equivalent), down nearly 2 percent and the smallest since June.  Imports
decreased in each major end-use category except yarn, thread, and fabric. 
Lower shipments of cotton, wool, and manmade textiles more than offset slight
increases in other fibers.  Cotton imports, at 342 million pounds, accounted
for 50 percent of all textile shipments.  However, these were the smallest
cotton imports since May.  Textile imports during January through October were
8 percent above the corresponding period of 1993.  Cotton textile imports were
up only 5 percent during the first 10 months of 1994.

October textile exports, at 248 million pounds, increased for the third
consecutive month and were the largest monthly shipments of 1994.  Exports
were up more than 5 million pounds from September and slightly above October
1993.  Increases occurred for all end uses and for all types of fibers, except
manmade.  Cotton textile exports, at a record 106 million pounds, were 4
percent above September and 20 percent above a year ago.

Overall, the textile trade deficit for the first 10 months of 1994 totaled 3.9
billion pounds, 8 percent higher than a year earlier.  The cumulative cotton
trade deficit, however, was only 1 percent above shipments during the first 10
months of 1993.  In addition, cotton's share of the trade deficit has declined
from 61.4 to 57.7 percent due to stronger export demand.  Larger cotton
textile exports continue to support domestic mill use and limit increases in
the total trade deficit.

Foreign Production and Consumption Outlook Favors U.S. Exports

Estimated foreign production for 1994/95 was lowered nearly 2 million bales
this month to 64.3 million, while trade and consumption were raised slightly. 
The largest production change was in China, where the crop was reduced 1.2
million bales to 19.5 million.  Estimated Pakistani production was reduced
further in January to 6 million bales, the lowest since 1985.  Smaller
reductions occurred in other countries and in Central Asia.

Reduced crop prospects in China and Pakistan mean higher expected imports by
these coutries, while smaller Central Asian crops ensure an even higher share
of world trade for the United States.  In 1994/95, China is forecast to import
1.85 million bales of cotton, up 450,000 bales from December's forecast, while
Pakistan is forecast to import 600,000 bales, up 300,000.

With this improved outlook for foreign demand, the U.S. export forecast was
raised 1 million bales, to 9.2 million.  Increasingly favorable trade
prospects have been reflected in U.S. export sales.  Export commitments
continued rising during December, growing about 1 million bales and surpassing
10 million bales in early January.  With U.S. exports forecast at 9.2 million
bales for 1994/95, the U.S. share of world trade is expected to reach 33
percent, the highest since 1960.

Cotton Prices Increase

U.S. cotton prices moved higher in December and reached their highest level in
more than 3 years.  The average price received by producers for upland cotton
through mid-December was 71.3 cents per pound, compared with 69.3 cents in
November and 56.5 cents a year ago.  Similarly, spot prices for both ELS and
upland cotton increased in December.  ELS spot prices rose to $1.08, up 6
percent from a month earlier and 24 cents higher than a year earlier.  Upland
spot prices climbed to 82 cents per pound, the highest since May 1990.

Since the December average was more than 130 percent of the average for the
preceding 36 months, producers with cotton loans that expire January 31 will
not be allowed to extend these loans for an additional 8 months.  In addition,
current U.S. price conditions have triggered a "limited global import quota"
that will allow cotton users to import an additional 426.9 million pounds of
upland cotton from January 6 through April 6, 1995.  Because world cotton
supplies are relatively tight, only small quantities of upland, if any, are
expected to be imported during this period.

Similarly, mill-delivered cotton prices increased 9.5 cents in December to
87.4 cents per pound.  December's prices were 22 cents above December 1993 and
the highest since June 1990.  While cotton prices have increased dramatically
in the past 3 months, manmade and rayon prices have been flat.  Even so,
polyester prices, at 78 cents per pound, are at their highest since March
1991.  Rayon prices are also higher this year, averaging $1.04 per pound
between October and December.

The adjusted world price (AWP) continued to rise into early January as foreign
production problems and strong export demand have elevated prices.  For the
week of January 6-12, the AWP in effect was 77.87 cents per pound, the highest
since the marketing loan program began in August 1986.  In addition, Northern
Europe prices have risen since mid-October.  The Cotlook A Index increased
from an average price of 74 cents in October to 87 cents in December.

By early January, the A Index reached 92 cents per pound, with 7 of the 14
styles quoted.  About 12 cents separated the lowest and highest quotes in the
Index.  Central Asia remains the lowest quote while California/Arizona is the
highest.  Memphis territory was the second highest priced cotton.  For coarse
grades, the B Index has not been quoted since mid-November as only two styles
are offered at this time.  About 7 cents separated the low Central Asian and
the Orleans/Texas quote.


1995/96 Cotton Outlook

The outlook for 1995/96 points to larger planted acreage as a result of the
final zero percent upland ARP announcement.  Strong demand for U.S. cotton
this season is expected to offset the record production and has pushed
projected 1994/95 carryover 9 percent below the beginning level and the lowest
since 1990/91.  Although area could rise over a million acres next season, a
return to more normal yields and abandonment may limit the potential of the
1995 crop.  U.S. production in 1995/96 could range between 19 and 21 million
bales.  Despite the possibility of back-to-back record crops, total cotton use
is projected to continue strong, which could moderate any rise in stocks next
season.

U.S. COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1994/95
                                            --------------------------
Item                         1993/94        Nov        Dec        Jan
----------------------------------------------------------------------
Upland:                                      Million acres
  Planted                      13.25      13.89      13.89      13.56
    Program                    11.44      11.11      11.11      11.11
  Harvested                    12.59      13.27      13.27      13.16
                                                Pounds
  Yield/harvested acre           601        691        695        707
                                        Million 480-lb. bales
  Beginning stocks              4.46       3.30       3.30       3.30
  Production                   15.76      19.10      19.22      19.39
    Total supply               20.23      22.41      22.53      22.69
  Mill use                     10.35      10.93      10.93      10.93
  Exports                       6.56       6.85       7.85       8.85
    Total use                  16.90      17.78      18.78      19.78
  Ending stocks                 3.30       4.75       3.86       3.07
                                               Percent
  Stocks-to-use ratio           19.5       26.7       20.5       15.5
Extra-long staple:                           1,000 acres
  Planted                        190        175        175        169
    Program                       89         84         84         84
  Harvested                      189        174        175        166
                                                Pounds
  Yield/harvested acre           938        982        962        987
                                          1,000 480-lb. bales
  Beginning stocks               206        227        227        227
  Production                     370        355        350        342
    Total supply                 576        582        577        569
  Mill use                        72         75         75         75
  Exports                        307        350        350        350
    Total use                    379        425        425        425
  Ending stocks                  227        147        142        134
                                               Percent
  Stocks-to-use ratio           59.9       34.6       33.4       31.5
----------------------------------------------------------------------
Based on USDA estimates.


WORLD COTTON SUPPLY AND USE ESTIMATES
----------------------------------------------------------------------
                                                   1994/95
                                            --------------------------
Item                         1993/94       Nov        Dec        Jan
----------------------------------------------------------------------
Supply:                                 Million 480-lb. bales
Beginning stocks
  World                        37.33      29.82      30.38      29.94
  Foreign                      32.66      26.29      26.85      26.41
Production
  World                        76.92      86.83      85.82      84.01
  Foreign                      60.79      67.38      66.25      64.29
Imports
  World                        27.94      27.23      27.85      28.76
  Foreign                      27.93      27.23      27.84      28.75
Use:
Mill use
  World                        84.89      85.90      85.80      86.11
  Foreign                      74.47      74.90      74.80      75.11
Exports
  World                        26.84      26.98      27.24      27.92
  Foreign                      19.98      19.78      19.04      18.72
Ending stocks
  World                        29.94      30.89      30.85      28.57
  Foreign                      26.41      25.99      26.85      25.37
Stocks-to-use ratio                            Percent
  World                         35.3       36.0       36.0       33.2
  Foreign                       35.5       34.7       35.9       33.8
----------------------------------------------------------------------
Based on USDA estimates.

FIBER SUPPLY
----------------------------------------------------------------------
                                           1994                  1993
                                ----------------------------
Item                             Sep        Oct        Nov        Nov
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Ginnings                     1,700      6,824      6,826      5,335
  Imports since August 1         2.6        2.6         NA        0.6
  Stocks, beginning            2,676      3,083      8,631      9,362
    At mills                     657        602        591        603
    Public storage             1,802      2,089      6,734      7,495
    CCC stocks                   233        116        940      1,314

Manmade:                                   Million pounds
  Production                   828.0      870.7      811.9      761.1
    Noncellulosic              786.0      827.0      773.2      722.9
    Cellulosic                  42.0       45.0       38.7       38.2
    Total since January 1    7,126.1    7,998.1    8,810.0    8,088.2

                                           1994                  1993
                                ----------------------------
                                 Aug        Sep        Oct        Oct
                                --------------------------------------
                                            Million pounds
  Raw fiber imports            101.4       92.4       94.6       77.0
    Noncellulosic               93.8       86.6       88.8       68.0
    Cellulosic                   7.6        5.8        5.8        9.0
    Total since January 1      613.7      706.1      800.7      783.8

Wool and Mohair:                            1,000 pounds
  Raw wool imports, clean      6,476      4,081      5,723      7,707
    48's-and-finer             4,466      1,907      3,363      5,733
    Not-finer-than-46's        1,940      2,147      2,314      1,851
    Total since January 1     66,484     70,564     76,288     84,718

  Wool top imports               387        428        271        344
    Total since January 1      2,681      3,109      3,380      3,034

  Mohair imports, clean           62          0         62          0
    Total since January 1        109        109        171         14
----------------------------------------------------------------------
NA = Not available.


COTTON SYSTEM FIBER CONSUMPTION
----------------------------------------------------------------------
                                           1994                  1993
                                ----------------------------
Item                             Sep        Oct        Nov        Nov
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
All consumed by mills 1/         961        935        940        836
  Total since August 1 1/      1,985      2,921      3,861      3,500
  SA annual rate 2/           11,112     10,997     11,179      7,936
  SA daily rate 2/              42.7       42.3       43.0       38.2
  Daily rate                    43.7       44.5       42.7       38.0

Upland consumed by mills 1/      954        928        933        832
  Total since August 1 1/      1,971      2,899      3,831      3,480
  SA annual rate 2/           11,063     10,928     11,092      9,882
  SA daily rate 2/              42.3       41.9       42.7       38.0
  Daily rate                    43.4       44.2       42.4       37.8

Spindles in place              7,481      7,398      7,372      8,169
  Active spindles              7,069      6,961      6,933      7,660
    100 percent cotton         2,965      2,919      2,913      3,229
    100 percent manmade        1,231      1,181      1,182      1,292
    Blends                     2,873      2,861      2,838      3,139

Cotton's share of fibers        77.1       76.9       76.5       76.1

Manmade:                                    1,000 pounds
Total consumed by mills 1/   137,085    135,427    138,356    126,155
  Total since August 1 1/    285,490    420,717    559,273    535,048
  Daily rate                   6,231      6,449      6,289      5,734
    Noncellulosic staple       5,341      5,492      5,323      4,845
    Cellulosic staple            890        957        966        889
----------------------------------------------------------------------
1/ Adjusted to calendar month.  2/ SA = seasonally adjusted.

FIBER EXPORTS
----------------------------------------------------------------------
                                           1994                  1993
                                ----------------------------
Item                             Aug        Sep        Oct        Oct
----------------------------------------------------------------------
Cotton:                                  1,000 480-lb. bales
  Upland exports                 515        320        336        334
    Total since August 1         515        835      1,171        832
  Sales for next season           16         12         74          2
    Total since August 1          16         28        102        133

  ELS exports                   16.1       12.9        5.1       14.2
    Total since August 1        16.1       29.0       34.1       51.1
  Sales for next season          0.0        0.0        0.0        0.0
    Total since August 1         0.0        0.0        0.0        1.6

Manmade:                                   Million pounds
  Raw fiber exports             82.6       81.1       79.6       64.2
    Noncellulosic               77.4       76.6       74.3       60.6
    Cellulosic                   5.2        4.5        5.3        3.6
    Total since January 1      581.9      663.0      742.6      559.6

Wool and Mohair:                           1,000 pounds
  Raw wool exports, clean      141.7      122.7      409.9       76.8
    Total since January 1    2,060.9    2,183.6    2,593.4    2,244.1
  Wool top exports           1,564.5    1,357.0      912.4      870.4
    Total since January 1    8,713.0   10,070.0   10,982.5    7,608.7

  Mohair exports, clean        766.0      695.7    1,268.0      605.6
    Total since January 1    4,788.0    5,483.7    6,751.7    4,693.5
----------------------------------------------------------------------


FIBER PRICES
----------------------------------------------------------------------
                                           1994                  1993
                                ----------------------------
Item                             Oct        Nov        Dec        Dec
----------------------------------------------------------------------
Domestic cotton prices:                    Cents per pound
  Adjusted World Price         60.11      63.14      72.09      45.52
  Mar'95 futures               70.77      75.57      84.84      65.55
  Dec'95 futures               68.93      70.24      72.21         NQ
  Upland spot 41-34            67.58      72.00      81.92      60.29
  Pima 46-03                   99.07     101.20     108.83      84.17
  Avg. price received by:
    Upland producers           65.70      69.30      71.30      57.10

  Mill delivered:
    Cotton
      Actual                   72.98      76.91      87.39      64.96
      Raw fiber equivalent     81.09      85.46      97.10      72.18
    Rayon staple
      Actual                  104.00     104.00     104.00     112.00
      Raw fiber equivalent    108.33     108.33     108.33     116.67
    Polyester staple
      Actual                   78.00      78.00      78.00      72.00
      Raw fiber equivalent     81.25      81.25      81.25      75.00

    Price ratios                               Percent
      Cotton/rayon              74.9       78.9       89.6       61.9
      Cotton/polyester          99.8      105.2      119.5       96.2

Northern Europe cotton quotes:            Cents per pound
  A Index                      74.09      77.28      87.06      59.84
  Memphis Territory            76.88      80.94      92.15      64.55
  California/Arizona           77.56      82.94      96.65      63.25
  B Index                      72.31      75.98         NQ      57.31
  Orleans/Texas                73.81      78.31      90.01      58.32

Wool prices (clean):                      Dollars per pound
  U.S. 56's                     1.40       1.45       1.45       1.05
  Australian 56's 1/            1.96       2.06       2.17       1.48
  U.S. 60's                     1.60       1.61       1.61       1.15
  Australian 60's 1/            2.09       2.21       2.27       1.54
  U.S. 64's                     2.38       2.38       2.38       1.33
  Australian 64's 1/            2.56       2.75       2.81       1.76
----------------------------------------------------------------------
NQ = No quote.
1/ In bond, Charleston, SC.  2/ greasy.

TEXTILE TRADE
----------------------------------------------------------------------
                                           1994                  1993
                                ----------------------------
Item                             Aug        Sep        Oct        Oct
----------------------------------------------------------------------
Imports:                                   1,000 pounds 1/

  Yarn, thread, and fabric   178,599    152,636    168,038    167,880
    Cotton                    86,544     72,620     73,350     81,335
    Linen                     16,025     12,693     25,628     22,958
    Wool                       4,263      3,930      4,491      3,713
    Silk                         898        724        834        321
    Manmade                   70,869     62,669     63,735     59,553

  Apparel                    526,249    474,103    462,646    387,025
    Cotton                   275,392    243,391    242,630    197,420
    Linen                     24,162     22,183     23,753     24,546
    Wool                      28,012     26,812     24,164     18,091
    Silk                      14,579     12,977     15,924     17,255
    Manmade                  184,104    168,740    156,175    129,713

  House furnishings           39,175     37,305     28,471     35,060
    Cotton                    28,448     26,381     19,642     26,090
    Linen                        169        156        221        120
    Wool                         125        175        164        115
    Silk                          27         35         19         16
    Manmade                   10,406     10,558      8,425      8,719

  Floor covering              21,615     21,824     18,066     16,853
    Cotton                     5,156      4,299      4,466      5,084
    Linen                      3,479      3,568      3,322      1,483
    Wool                       6,128      7,027      3,231      5,439
    Silk                         398        494        416        314
    Manmade                    6,454      6,436      6,631      4,533

  Total imports 2/           772,618    692,395    682,840    613,015
    Cotton                   398,462    349,158    341,900    312,562
    Linen                     43,938     38,766     52,962     49,174
    Wool                      38,916     38,281     32,282     27,624
    Silk                      15,905     14,231     17,194     17,908
    Manmade                  275,397    251,959    238,502    205,747

Exports:                                  1,000 pounds 1/

  Yarn, thread, and fabric   115,969    117,415    118,195    111,149
    Cotton                    34,770     36,674     38,087     32,281
    Linen                      3,179      3,238      3,551      2,372
    Wool                       3,102      3,060      3,336      2,173
    Silk                       1,259      1,199      1,471      1,217
    Manmade                   73,659     73,244     71,750     73,106

  Apparel                     88,937     91,770     93,865     75,900
    Cotton                    54,998     58,263     59,592     47,914
    Linen                      2,316      2,153      2,840      1,905
    Wool                       3,701      3,222      3,003      3,016
    Silk                       1,534      1,489      1,568      1,537
    Manmade                   26,388     26,643     26,862     21,528

  House furnishings            6,516      5,812      7,503      6,101
    Cotton                     3,855      3,341      4,426      3,560
    Linen                        191        198        187        251
    Wool                          74         48         80         75
    Silk                          89         80         99        175
    Manmade                    2,307      2,145      2,711      2,040

  Floor covering              28,390     27,027     28,006     53,293
    Cotton                     2,990      2,984      3,410      4,159
    Linen                      1,366      1,311      1,180      2,367
    Wool                       1,603      1,333      1,753      1,222
    Silk 3/                      ---        ---        ---        ---
    Manmade                   22,431     21,399     21,663     45,545

  Total exports 2/           240,189    242,431    247,930    246,899
    Cotton                    96,678    101,321    105,556     87,958
    Linen                      7,065      6,912      7,767      6,904
    Wool                       8,499      7,688      8,196      6,504
    Silk                       2,882      2,768      3,138      2,929
    Manmade                  125,065    123,742    123,273    142,604
---------------------------------------------------------------------
1/ Raw fiber equivalent.  2/ Includes headgear.  3/ Absence of trade.

ESTIMATED 1994 COTTON ACREAGE, YIELD, AND PRODUCTION
---------------------------------------------------------------------------
Item                          Aug     Sep    Oct      Nov     Dec     Jan
---------------------------------------------------------------------------
Upland:

Southeast
  Harvested   1,000 acres    2,123   2,163   2,163   2,147   2,147   2,154
  Yield         lbs/acre       699     716     725     746     782     818
  Production  1,000 bales    3,092   3,227   3,267   3,337   3,497   3,669

Delta
  Harvested   1,000 acres    4,030   4,030   4,060   4,095   4,100   4,060
  Yield         lbs/acre       758     742     748     795     805     815
  Production  1,000 bales    6,360   6,230   6,330   6,780   6,880   6,895

Southeast
  Harvested   1,000 acres    5,566   5,566   5,566   5,566   5,566   5,491
  Yield         lbs/acre       465     453     452     452     452     458
  Production  1,000 bales    5,391   5,251   5,241   5,236   5,236   5,242
West
  Harvested   1,000 acres    1,454   1,454   1,464   1,464   1,459   1,457
  Yield         lbs/acre     1,316   1,304   1,279   1,279   1,188   1,179
  Production  1,000 bales    3,985   3,950   3,900   3,900   3,610   3,580

Total Upland
  Harvested   1,000 acres   13,173  13,213  13,253  13,267  13,272  13,162
  Yield         lbs/acre       686     678     686     691     695     707
  Production  1,000 bales   18,828  18,658  18,938  19,098  19,223  19,386

Pima
  Harvested   1,000 acres      174     174     174     174     174     166
  Yield         lbs/acre     1,015   1,015   1,009     982     962     987
  Production  1,000 bales      367     367     365     355     350     342

Total All Kinds
  Harvested   1,000 acres   13,347  13,387  13,426  13,440  13,446  13,328
  Yield         lbs/acre       690     682     690     695     699     710
  Production  1,000 bales   19,195  19,025  19,303  19,453  19,573  19,728
---------------------------------------------------------------------------

The next issue of the Cotton and Wool Outlook will be released on
February 13, 1995.  For further information, contact Bob Skinner,
Leslie Meyer, John Lawler, or Steve MacDonald at (202) 219-0840.

                                   END-END-END