The Cotton situation

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Material Information

Title:
The Cotton situation
Physical Description:
v. : ; 27 cm.
Language:
English
Creator:
United States -- Dept. of Agriculture. -- Economic Research Service
United States -- Agricultural Marketing Service
United States -- Bureau of Agricultural Economics
Publisher:
Economic Research Service, U. S. Dept. of Agriculture.
Place of Publication:
Washington, D.C.
Frequency:
five no. a year
bimonthly[ former may 1961-]
irregular[ former 1945/46-mar. 1961]
monthly[ former 1936-1944]
quarterly
completely irregular

Subjects

Subjects / Keywords:
Cotton trade -- Statistics -- Periodicals   ( lcsh )
Cotton trade -- Periodicals   ( lcsh )
Genre:
federal government publication   ( marcgt )
statistics   ( marcgt )
periodical   ( marcgt )

Notes

Dates or Sequential Designation:
CS-1 (Nov. 1936) -
Dates or Sequential Designation:
Nov. 1936-Apr. 1975.
Dates or Sequential Designation:
Ceased publication in Apr. 1975.
Issuing Body:
Issued by: U.S. Bureau of Agricultural Economics, 1936-Oct. 1953; by: Agricultural Marketing Service, Nov. 1953-Mar. 1961; by: Dept. of Agriculture, Economic Research Service, May 1961-Apr. 1975.
Issuing Body:
Issues for 1936-Oct. 1953 published by the U. S. Bureau of Agricultural Economics; Nov. 1953-Mar. 1961 by the Agricultural Marketing Service; May 1961-Apr. 1975 by the Dept. of Agriculture, Economic Research Service.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 020142316
oclc - 01768374
lccn - 63045282
Classification:
lcc - HD9070.1 .C78
System ID:
AA00013000:00027

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World cotton prospects
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Cotton and wool situation
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Wool situation
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Cotton and wool situation
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Full Text


UNITED STATES DEPARTMENT OF AGRPJCULTURE I
Bureau of Agricultural Economics l EPOSTrIRY
Washington

CS-13 November 27, '1_.7.


THE COTTON SI TU ATI 0NII


This month's issue consists of the regular annual
outlook report on cotton, released by the Bureau
on November 4 and revised as of the November 8 Crop
Report. In addition, a brief review of develop-
ments during recent weeks is included.


REVIEW OF RECENT DEVELOPMENTS

The spot price of middling 7/8" cotton at the 10 markets averaged

8.14 cents during October, compared with 8.72 in September and with 12.07

cents in October 1936. Prices for the weeks ended 1November 6, 13, and 20

were 7.74, 7.78, and 7.77 cents, respectively. The prevailing low level of

cotton prices, the Bureau of Agricultural Economics states, is associated

with what is by far the largest world supply of all kinds of cotton on record,

declining cotton consumption and increasing stocks of cotton textiles in the

United States, a sharp curtailment in cotton purchases by Japan, a low level

of cotton consumption in China, and lower prices for many other commodities

and securities.

Farmers apparently are pledging their cotton for Government loans at

an accelerated rate. The Commodity Credit Corporation reported a tot9l of

more than 2,600,00C bales of the new crop in the loan stock through Noverber 24.

World consumption of all kinds of cotton was at a somewv:,at hi-h-r rate

during the first 2 months of the current season than in the correoponJir.;;

period a year earlier, according to the Vew York Cotton Ex"ha-.-e S-er'Vi'rs.

Early last season, however, mill activity and. cotton consui-,ption wetre tend-

ing to increase whereas such is not the c:ar:p this y"ar. VWorl. :.ill







CS-13


consumption of American cotton was slightly larger in the first 2 months of

this year than in the corresponding months in 1936, but most of the increase

in total consumption was accounted for by foreign cotton.

Utilization of all kinds of cotton by mills in the United States in

October amounted to 526,000 bales, a decrease of 19 Dercent from October a

year earlier. Consumption was still quite high, ho'.ever, relative to most

previous seasons. Domestic consumption in the 3 months ended October 31

totaled 1,733,000 bales compared with 1,R56,000 in the corresponding period

in 1936, a decline of 7 percent.

Mill activity and cotton consumption continued high during October

and early llovember in most European countries. The weakness in raw cotton

prices and the disturbed uorld situation, however, discouraged purchases of

both raw cotton and cotton goods. The Chinese cotton textile industry is

almost at a standstill, but mill activity in Japan is reported to be at peak

levels in spite of a reduced volume of raw cotton imports and persistent

reports during the past 2 or 3 months that a sharp curtailment in Japanese

mill operations was impending.

Exports of cotton from the United States in the 3 months ended October

31 amounted to 1,637,00C bales, only slightly more than exports in the cor-

responding period last season. Exports to European countries have been much

larger so far this season than last year, but exports to Japan have been less

than one-sixth as large.


- 2 -







Revised ag ef
Ncv. 8 crep report
T'E COTTO:' G ITLOO} FOP 1936


Su-m.ary

World Cotton Su-rlrP- at i'-.. Ki.'

World supply of cotton for the 127-73 seuso:: is nov: (early !'ovcrber)
expected to be about 51,40`),0C0 bales. This is 1C percent larger than the
record surly cf the rreviors scnron and ore-+.hird l.arcer th-.r. the uaverare
for the 5 years, 1926-29 to 1932-23. '.;rl crr:--over cn Auwst 1 'az
slightly less than a year earlier, but proCuct'ion w.ll bc -:uch larger thar
the new high of t-c. previous season.

The world cnppl of Amcricon couton for the cvrrc t. ser.sor is e:-xpected
to be about 24,20;,0.'0 Lt.l which is 25 prrccr.t l. '-. r than in the previous
season,. but 8. percent lces thai: tI-e pcr spl2y 'F:.ci 2L"-$5. o'f ..orld
carry-over of Ar.crican ccttcn c.t the be in:.AL. of t.c: sccson was sonc.:hat
loss than a year carlicr, r:.rd the snl,..1? .::t in 7 .cx'r. ':ut pkc 39.27 .rop
of the United States is LXCrctcd tc to 47 :c-.ccnt l.-rcr -}-an th, prccedirg
crop, and the l.rLest i:r hi-stcry.

The word st-,pply cf for( i':. crtcn i.n 1937-35 is c::pcotc2 to reach
a new peak (27,2000,X00 li.lc ) for the fifth. csns.c'tiv' -- ar and c.:cc_2d
the 5-ycar (1".6-..' av-'rac. b:, pc rcc nt. 'ec in'-rcc.; in th-. current
season's suppl of fr-rcin cottc-. in cnrp-rincn wtr 1L-j;.-3 7 is larcoly iho
result of the :..ar:. d in-rc-..se in Hupsivn, brazil ian, anc C-incsc ;'rc:'.t's.
The increase over thu 5-year arvc-a-ug i:; due tr ;..r.-: d ir.crcance in t?:sc
growths as well as M:aterial ircr,.aser in rndi-.n, E 'ptia'n, and isec nr.-
eous gro:.-.tls. Forcing r. r'ro.ucti ;n this season is c:::' ,cLcd in early :.c.-c:L:.-r
to reach 20,100,000 bales. This could d be anr. incrcsc. of 10 percc'ni .-cr the
record crop of the prcvic'u- srescn and 54 percent over t 5-y.-.ar acrrc.
Such a crop would ex::ceed b, 1, ,..rccrt h. 1.rr,-c 1927-78 r.itL rt..t .s
production, v-hur.ous in ther 5 ycrcs urdcd 1932-33 t. C":._-tir crcp i,.n- obcut
ono-third larger tP. -.n that cf fcrr-ir country, :.

The 19S3 Unitr.d Stu*c: acrca c -..al u-.ir it.. '- ., .C ltrr. ecnsrr-
vatior. program ha: b-en soE -at cbot 2' ,T .., cnrr... ." s -.. .c'-c, v.ith
yields equal tc tl.r. .vera,'L of' t'c rL 1 -; .r .-.. 1 1 -'c cr-c %b : o:t
7,000,000 balh lZC': t'..'.r the crcT of I'." c';'rc:.t s.-.3rr.. J.c;' :-. do.- stic
production would pr-babl' -;ivc a ror.c.-'.: -. 1' Icr :: ri-' c' 1 r .'. crican
cotton icxt sc. sr, dccsit the ruosy:cti'c. _..r.:cLd ....cr.... r i -:rry:-'vcr
on August 1, 1933. V/cr] rarry- '.cr of f'-reir.n uct :'". 't h" t i-ri...r of
the 1938-39 zursor. i also cx-ccted to be ro Lr'.I- l. l'r. r t rn or ..u ust 1
this year. The l(..-'r prics Lni..r rrcAivLd -.; .cet f'-'rL i :-. Tr-'h.sers for
their 1937-3J creo iowc'.' ;r, .i,,' rcrll ii. a ":'- i. -' rc C 'n u-cr0 :: c 'xnd
production in 193Z-39.







Cotton 2


World Cotton Consumption Again Increased

Total world mill consumption of cotton for 1936-37 of 31,000,000
bales exceeded the previous year's record high consumption by about 12
percent and was more than one-fourth larger than the average f.r the 5 years
1928-29 to 1932-33. Total consumption of kALerican cotton of 13,100,000
bales last season was slightly larger than a year carlicr but slightly
smaller than the 5-yc.-r average. The total world mill consumption of foreign
cotton during the 12 months ended July 1937 was 18 percent larger tha:: the
record high of the previous season and 65 percer..t r.bove the 1928-29 to 1932-33
average. This marked increase in the consumption of foreign cotton was
accompanied by a decline in the foreign consumption of American cotton which
in 1936-37 was 15 percent below that of the previous season and 30 percent
below the average for the above 5-ycar period. The incrcsec of about
1,500,000 bales in the consumption of Amernican cotton in the United States
in 1936-37, which more than offset the decline in the foreign consumption
of American cotton, resulted in a now all-time hij. consumpticn in the
United States which exceeded the 5-year average by norc than onc-th.ird.

A decline in the consumption of Ainericr.n cotton during the 1936-37
season took place in practically all foreign countries using significant
quantities of American cotton. On the other hind the consumption of foreign
cotton showed a significant increase in most cf thesc countries. The
decline in the consumption of Amcrican cotton and i.ncreascd use of foreign
cotton, resulted in American cotton declining from an a.vcrajc of 41 percent
of the total mill consumption of cotton outside the Unitc. States in the 5
years 1928-29 to 1932-33 to 23 percent in 1936-37.

Conditions in !Tovembcr indicate that cotton consumption in the
United States during the 1237-38 season will -ro-.U.bly bc less than the
record consumption of the previous season but ,'-well a.bocvo the average for the
5 years ended 1932-33. In most European and in a few -.ther foreign countries
it is expected that cotton consumption during the current season will again
increase. But in Ja-ran and China military cper'?tions and other factors are
expected to reduce cotton-mill consumption materia.lly. Increased supplies
and lower prices of '.icrican 'cotton rclativc tc other growths in the early
part of the current season arc favorable to an increase in the proportion
of American cotton consumed in foreign countries in 1937-38.

Cotton Prices and Farm Income

The average price of .'iddling 7/8-inch cotton in the 10 markets dur-
ing 1936-37 was more than 1 cent per pcur.c.- higher t.an the averages for the
previous season and for the 5 yc,:rs cniod July 1933, and higher than the
average for any scasnr. since 1929-30. These prices declined from a peak
of nearly 15 cents toward the end of .arch 1937 to. blow 8 cents early in
October. Associated with this sharp decline in ccttcn prices were the pros-
ucctive increase in the supplies of cotton, Lleclining cotton consumption and
increasing stocks of cotton textiles, and marked declines in prices of many
cther connodities and of securities.






Cotton 3


In the 1936-37 nr.rkcting roas:cn the. gros- United States farm income
from lint ccttcn cc-icuntcd to a.bort '76-,)0'0,CO'J. :his wr.s an incrcasc of
30 percent over t1e Frnvi.-us scEcn, W'ts hi ihost in 7 ycars, and 80
percent larger than the le:.' of 1932-33, but '7 -(erccr.t 1o.s than the 5-yecr
(1928-29 to 1932-33) avcrr.efc. Including th- incc:nc frcm the sale cf cotton-
seed and Govornn.nt ayriionts vibi: resrct t, c otton frr ccofLrati ng in the
adjustnor.t frocr:.-, th.e Crcss farm incrr0o fr-r. the 1976-37 cotton crcp was
noro than tvice as larre as 1932-33 and 7 rcrcc-t larcor than the 5-ycar
average. With an inrcrcasc of 47 prcal.t in tih size of the crc9, cffvet-
ting in large .arrt the docli. !tr prices, total cross farr- incocne fror
the 1937 crop, including Govwrnn-cnt lio.:-s c na pny:rnts vijth rosc-ct to
cotton, is exicctcd to cquol or excced thc ir.c.orc fron t-'c 193^ crop.


Su-l1y


World Carry-over Slightly R1oduecd


The world carry-cvcr of all cotton at the bc.im-ni:.; -f the 1937-38
season was slightly smaller than a ycrr ..rlicr, tc smallest in 7 years,
but approximately the Fano ~.- t'he 5-yc:.r (19LS-52) v-c.ra c. A subrtarti'l
dcolino in the vrrl-1 cr.rry-o- r cf jmSricc. cotton ':'urin the 1936-37
season was lar-el'y -ffsct ty, an incrc sc in th:o carry-c -or of feroiCn cotton.
The decline in tht carry-ever of A .crican reduced it to thie lo:c;st level
since August 1930, arnd 1,-00,C000 b:Ics blow.v th'e 5-yc:.r .vcrage, "rhcrcCas
the carry-over of foreign cotton incrc codr tc ne:- high ri wr.r cne-fcurth
larger than tic 5-ycr..r averar:c. Thcro sccms littlL X vubt but that the world
carry-over of both J;-.crican r.nd forci-n cotton w-ill be sutstratitally Largcr
on Auguct 1, 1935 t]-!n at the beg'irii:~g. of tI c rr.scnt s, asCO. Stcckz of
Ar.ecricran cottcn will probably incraoso about 5,000,000 b-.les, with foreign
Crowths incro-sing by a :1mch seller quantity.

Cotton crr v.rcial: Wori.C crrry-n'.cr by rrcv.-+hs, rsp.cified puri,:'s


Season :
beginninC : E'ypti Tr
August 1 :
-
: Million
Avrrageo : bales L/i


1928-29 to :
1932-33


1.2


: ir iuan : Sunr'ry,
: : [r :-t' .r
: .illicn : Iill' .-1
: bvlcr 1/ : bales /_


: 2.5


: 1.9


Tot..al : .'s..--ic-.i.: -.11i
:"cor i 'r: : r. '..hs
,illin : i llion : millionn
bx-los 1/ Lvcl, 1/ t-al s I/
L ;


: 5.C


: 7.6 : 13.2


1932-33 : 1.4
1933-34 1.1
1934-35 : 1.1
1935-36 .8
1936-37 .8
1937-38 : .7
1937-38 as : Percent
percentage :
of avorgcc : 58.3
cmipilr(d from reports


: 1.9
: 2.5
: 3.3
: 2.5
: 2.3
: 3.1
: Percent


: 1.8
: 1.7
: 2.4-
: 2.7
3.1
: 3.3
: Percent


5.1
5.3


C.7

P'. re '-t


: 13.3 : 1S.3
: 1.8 : 17.1
: 10.7 : 17,5
: 3.0 : 15.0
7.0 : k2.7
: i.2 : 13.3
: i" .:cnt s L rcc".t


: 14i.0 : 173.7 : LW. a l.t 6 100.8
cf the hc': Y rk c.'ct n I .':, :::.,c .r-.:icL,


L/ A arican in ru.in.i- b.-lo. (uct.ntit,- rr.u.,' ;- !': "! s) mn'd fLroij-n in
balos ni' n'Trr(xirituly 417t p'ur.d r nrt.






Cotton 4


World Production Greatly Increased

'The world production of comncrcial cotton, for the ctrrcnt season
which is expected in Novombor to be about 38,100,000 bales is about 24
percent larger than the previous high of 193G-37 and 49 percent a'lo-,'. the
5-year (1928-32) avora-e. Over three-fourths of the increase in comparison
with last season is accounted for by an increcsc of 5,600,000 bales in the
United States crop, whereas 73 percent of the increase in compnrison.with
the 5-ycar avoraLe is accounted for by the marked increase in foreign pro-
duction.

-The 1937 domestic crop, which according to the Novc-rbcr 8 cstimatc
was 18,243,000 bales of 478 pounds net (cquivalc-nt to about 18,000,000
runninG bales, including an allowance for city crop), is 47 percent larger
than that of 1936, and the largest crop in history. The marked
increase in the current kicrican crrp is accounted for chiefly by the
unusually larcg yields per acre. Although the 1937 acrCece is new esti-
mated to be about 12 percent larger than that of 1936, it is 17 percent less
than the 5-year average. Average yields per acre fcr the United States of
259 pounds as cstimrted in November is 52 percent above the 5-ycar (1928-32)
average. The indicated yield per acre for the current crop is by far the
highest on record; The indicated'yield in every cctt:n-produc-ing State-is
materially above the 5-year average. Very favorabic Lgrcw:inf, conditions
throughout the Cotton Belt is one of the most important fr.ctcrs accounting
for the unusually high indicated average yields in 1937. In addition,
improved cultural practices, the use of the ncrc productive land, and soil
maintenance and soil-building practices under.the scil conservation prcgram
have no doubt contributed to increased yields during, recent years.

Cotton commercial: World production by growths, specified periods

Season : : : : : :
beginning : Egyptian : Indian : Sundry : Total A: erican: All
August 1 : : : growths : foreiCgn: : inds
: !illicn : Million : M1illion : .illic-n : Million : Million
5-year avera bales j/ : talos / : bales / : balcs 2/ bales 1/: bales 2/
1928-29 to
1932-33 : 1.5 : 4.3 5.1 : 10.9 : 14.6 : 25.5

1932-33 : 1.0 4.1 : 5.4 : 10.5 13.0 : 23.5
1933-34 : 1..7 4.8 : 6.9 13.4 : 12.7 : 26.1
1934-35 : 1.5 : 4.2 : 7.8 : 13.5 : 9.6 : 23.1
1935-36 : 1.8 : 5..3 : 8.7 : 15.8 : 10.5 : 26.3
1936-37 : 1.9 : 5,7 : 10.7 : 18.3 : 12.4 : 30.7
1937-38 : 2.3 : 5.7 : 12.1 : 20.1 : 18.0 : 38.1
1937-38 as : Perccnt : Percot : Porcent : F: rent : Percent : Percent
percentage :
of average : 153.3 : 132.6 237.3 : 18. : 123.3 149.4
Compiled from reports of the N.cv- York ~(ttcn Exclance Servic:
1/ Aimerican in running bales (counting round as half bales) and foreign
in bales of approximately 478 pouncz nt. '







Cotton 5


The production of corm-crcial cotton in forciSn cur.trics in 19,37-38
is expected (in Novonber) to total about 20,100,000 bales cf '786 pounds
net. This is approximately 1,800,000 bales larger than the previous crop
which was the record high up to that tine, a:,r1 is abcut 9,200,000 bales or
84 percent ?arCcr than the 192S-32 a'-orerc. The incrcesc in the prospective
current crop in cenparison r:.4th the 2936-57 production is larCcly rcc'Lunted
for by increased production: in China, Russia, Brazil, and a nw-:bcr of the
minor producing countries. These saer ccintrics accounted for a large pro-
portion of the increase ov'.r the 5-year aver-cG although the present crtim-ate
of the Indian crop is nearly 1,400,000 balcs r-r 33 percent lar'cr than the
5-:-ear avcrc-c and the Egyptian crop 860,0`00 1-lcs or 53 Tcr-e:.t Ir.ricr than
the 5-year average. Since 1932-b3 the toti.l yrcduction of cc rm'n.rcial cottcr.
in fcrcign countries has increased 9,60C,OCO balos or 91 percent. Dujrinn"
this 5-year period, 1932-33 to 1937-38, the production of co:.r-rcial cctten
in foreign countries has increased -.t a rate of nearly 2,0000,000 bales per
year, whereas during the prccedirng 10 ycars the annual rate of increase was
300,000 bales and in the' 25 years cndi,.f: with 1932-33 was. less than 200,000
bales.

The 1938 United States cotton acreage Coal rn.enr the agriculturnl
conservation proCrani, as announced in late October, -.-,.s set at 27,000,000
to 29,000,000 acres. Those acrcajcs arc 14 to 20 percent less than the
1937 estimated harvested acrcaL'o and 25 to 33 ecrccrt Icss than the 5-year
(1928-32) average. With such. arn n-rcaLc in 1938 and with yield per acre
equivalent to the average for t.c .: years tndc.' 1036 the rroducticn in 1938
would amount to about 10,800,000 to 11,600,000 balnrs. If, cn the other hand,
y&olds should be equal to the ave.a-nc for the 1928-32 period, the production
would total about 9,800,000 tc 10,600,000 balcs.

The outlook with respect t, cotton prrdintirn in foreign countries
is quite uncertain. The : r.recd rc.:huction in prices bcing ruecivod for the
current crcp in r.ot countries c.-d the accumulation -'f unscd c'.tton in the
hands of producers in sono foreign countries, however, r'.ry result in sc-.c
reduction in the 1938-39 fercian acrecag an.d -rcductiLn. This roL.r.s rrcbaLlc
despite any influence which the 1938 agricultural conservation }ru raj! col-
linC for a reduction in cotton acrcaco in the Unitcd States r.ny have cn
production plans in foreign countries.

World Suprly Lnrrcrt in History

Despite the smallest wor]-'. carry-over in 7-years, a larLc ir-licatcd
foreign and domestic production i:. cxrrctcd in Nov-.cior t. result ir. c.
world supply of all corriercial cotton for ti:. 1937-3" sr'.-c.n f L 1,5.00,000
bales. This is 7,100,000 brles or 10C yrceint l.rLcer than tic r-c .-r supply
of the previous season and 12,'.00,000 Lales cr 33 percent Ir.rIfr th'-n tL-
5-year (1028-32) avcraro. The inoroasc over 1936-37 is Jar el:' acc-untcd
for by the incruacc supply cf A:.,crice.n, while the in.crcra,:. in. c-.i. risncr
with the 5-year avcravc is almost ':ntircly caocuuntod for by the Itr.',.r
supply of forcifn r.ruvrths.







Cotton 6


Cotton commercial: World supply by growths, specified periods


Season : :
Beginning : Egyptian : Indian
Au,-ust 1 :
: Million : illicn
5-year average: bales /-: bales j/
1928-29 to
1932-33 : 2.7 : 6.9


:. Suindry : Tctal :A.crican: All
Sgrovwths : foreign: : kinds
: Million : M.illicn : million : Million
: bales / : bales 1/: halos bales J/


: 6.9


.: 16.5


: 22.2 : 38.7


1932-33 : 2.5 : 6.0 : 7.1 : 15.6 : 26.2 : 41.8
1933-34 : 2.8 : 7.4 : 8.5 : 1S.7 : 21.5 : 43.2
1934-35 : 2.6 : 7.5 10.2 : 20.3 :. 20.3 : 40.6
1935-36 : 2.6 : 7.8 : 11.5 : 21.9 : 19.5 : 41.4
1936-37 : 2.7 : 8.5 : 13.8 : 25.0 19.4 : 44.3
1937-38 : 3.0 : 8.8 : 15.4 : 27.2 : 24.2 : -1.4
1937-38 as : Percent : Percent : percent: Percent : Percent: Percent
pcrccntage of :
average : 111.1 : 127.5 : 223.2 : 16.8 : 109.0 : 132.8

Compiled from reports of the New York Cotton Exchange Service.
!/ American in running bales countingg round as half bales) and foreign
bales of apprroxinatcly 478 pounds not.


The world supply of American cotton for the current season is
estimated at 24,200,000 bales., This is 4,800,000 balcs cr 25 percent
largest than 1936-37 and 9 percent larger than tl.c 5-year average, but
2,000,000 bales smaller than the peak of 1932-33. On the basis of November
crop prospects the ccrTercial supply of foreign cotton is estimated at
27,200,000 bales which is 2,200,000 bales larger than the record supply of
the previous season and 10,700,000 bales or 65 percent larva or than the
5-year (1928-32) average.

In view of the prospective increase in the wcrld carry-over of both
American and foreign cotton, the 1938-39.world supply of cotton will be
larger thn.n in the current season unless the 1938-39 world production of
cormncrcial cotton is nntorially reduced. If the 193C doncstic cotton
acreage is no larger than the goal announced in Octobcr by the Agricultural
Adjustment Adninistration, and if yields are about equal to the average for
the last 4 years, the 193r-39 wcrld supply of Ar.cricarn cotton seems likely
to be scnme'hat less than for the current season. With a substantial increase
in the carry-over of forcirn cotton in prospect, the supply of foreign
cotton for the 1933-39 season is expected to be about the some as that for
the current season.







Consumption

Jol4d Mill_CopnwmptionAgain Increases to New High

Total world mill consumption of cotton in 1936-37 amounted to 31,000,000
bales and exceeded the previous year's record consumption by about 12 percent and
was 28 percent larger than the average for the 5 years ended with 1932-33. World
consumption of 13,093,000 bales of American cotton was 5 percent larger than a
year earlier but a little less than the 5-year average. In the United States, con-
sumption of American cotton increased 1,500,000 bales or 25 percent over the pre-
vious year but in foreign countries consumption of American decreased nearly
1,000,000 bales or 15 percent. World consumption of cotton other than American in
1936-37 increased 2,700,000 bales or 18 percent and was 65 percent larger than the
5-year average, About 80 percent of the increase of 7,000,000 bales in the con-
sumption of foreign cotton in 1936-37 over the 5-year average waA accounted for by
sundries, particularly Brazilian, Russian, and -Chinese but substantial increases
also occurred in consumption of Indian and Egyptian.

Total cotton consumption, both in the United States and in foreign countries
was larger during 1936-37 than in any other year. Utilization of rayon yarn and
rayon-staple fiber also established new, highs in this country and abroad. The in-
crease in industrial production during the year was substantial in most countries
buat indexes of textile manufacturing for the most part averaged higher than those
for general business activity. On the basis of present conditions, mill activity
in the United States, Japan, and China is expected to decrease in 1937-38. On the
other hand, increases are anticipated in Europe, India, and possibly in a few
other countries, and the expectations are that the world consumption of cotton will
: not be much, if any, smaller in 1937-38 than tho record consumption in 1936-37.
Consumption of American cotton in Europe and a few other countries is expected to
increase as a result of increased supplies and lower prices nf American relative
to other growths, increased exports of cotton textiles to markets formerly supplied
by Japan, and possibly some increases in textile buying in European markets.

Cotton: Mill Consumption in the world

Season : :: ::
begin- : United Rtates :: Foreign countries :: World
sing :- :: ::
*~~_. 1 Amerrican an:oreign: Total ::mericani:Foreign: Total ::Americn:Foreign* Total
L.o000 : 1.00: 1.ooo :: 1.ooo : 10F 1: ,oo0:: : 1,000 : 1.000
Average: b les ; bale : bales :: bales : bales : bales :: bales : bales : bales
193I-29: : : I :: : 1 7 f 7: 1:7T : :T:T


to .
1933-33

293-33;:
#953-.34;
pS34-35:
t915-36:
J936-37:_.
i956-37: .

#pr'owl of


5,683 : 210 : 5,893 :: 7,560 : 10,672: 18,232:: 13,243: 10,882:24,125

6,004 : 133 : 6,137 :: 8,381 : 10,133: 18,514:: 14,385: 10,266:24,651
5,553 : 147 : 5,700 :: 8,227 : 11,675: 19,902:: 13,780: 11,822:25,602
5,241 : 120 : 5,361 :: 5,965 : 14,162: 20,127:: 11,20E: 14,221 25,488
6,321 : 130 : 6,351 :: 6, 282 : 15,075: 21,357:: 12,b503: 15,205:27,708
7,768 : 18 : 7,950 :: 5325 : 17 716: 23, 041:: 13 0? 3: 17 893:30,991
A3.6..7nt.-u nf 5-yuar avcray o (19-o_( 9 1932-33;
136.7 86.? 1't1.9 :: 7)0.4 : 166.0 : 1I:.4 :: 98.0: 1645: 128.5
i.wriculturnl Econom.ics. Compiled from reports of the New York Cotton


@fl-'ri-ge Sorvice.
ij American cotton in running bales and foreign in equivalent bales of 478 pounds
P*a+ WAR)Fatl+









I3 the United States and Japan, however, a considerable decrease is expected,
despite the lowar level of cotton prices, and the probabilities are that world
consumption of American in 1927-38 will be about the same or somewhat larger
than in the previous year.

United Statos Consumntion Largest in History

The record cotton consumption of 7,950,000 bales in the United States in
1936-317 as 25 percent more than in the previous year and 35 percent more than
th: averrae for tho 5 yours ended with 1932--3. The increase over the previous
coeson resulted largely from improved business conditions and increased consumer
textile buying. But stocks of finished and unfinished cotton goods ancumulatod
in substantial volume in channels of distribution and in mill warehouses during
th. latter part of the 1936-37 season. Mill activity for the first 3 months of
the c'urrz.nt season was about the same as or slightly loss than the rato for the
corresponding nc.riod last season but considerably above the 5-year average. The
volume of cloth and yvrrn production, however, was much larger than sales by mills
and unsold stocks of cloth are substantially larger than in early November a
your ago. On the basis of present conditions, it is expected that mill con-
sumption in the United States in 1937-38 will be materially loss than the record
oonsu.tption for 1936-37 but woll above that for 1935-36 and the 5-year average.

Foreign Coipsumption at Reocord High

Tttal mill consumption in for--ign countries of 23,000,000 bales in 1936-37
was 8 percent more than in the previous season and 26 norc,.nt more than the
average for the 5 years ended with 1932-33. Consumption of American cotton out-
side the United States last season was 15 percent smaller than in the previous
year and 30 percent loss than the 5-year average. Total consumption of cotton
other than American in those countries was 18 percent larger than in the previous
season and 66 percent more than the 5-year average. In 1936-37, American cotton
comprised only 23 percent of the total consumption of cotton outside the United
States, against 29 percent in the provi(us year and 41 percent during the 5-year
period 1928-32. Increased supplies cf fcroign cotton and decreased supplies of
American accounted in large part for the.o decreases in the consumption of Amer-
ican and increases in that of foreign cotton during recent years, although in
sorme countries trade restrictions apparently have reduced imports of American
cotton more than those of othor gro.ths. Despite trade restrictions ".nd the sub-
stitution of rayon and other fibers for cotton in foreign countries, total con-
sumption ilcroosud substantially. In 1937-38 tho total consumption in countries
outside the United States is expected to be about the same or slightly smaller
than in the previous year. The incrohsod supply of American cotton in prospect
for 1937-38 and the smaller incroas.' in supplies of foreign cotton are favor-
able to an increase in the foreign consumption of American cotton relative to
other growths, unless exports are chocked by placing of a large volume of cotton
under Government loans in this country.







Gotton 9


Cotton: Mill consumption in principal foreign regions

Season : :: :
begin- : Eurone Orient : Elsewhere
ning : :: ::
jp" e r n-,F re .- _---. L'n : Total ::A a--
g._l_ :Aerican:Foreiil Total : :peri'can:Foroign: Total 1:American:Foreign: Total
: 000 : 1, : 1, 000oo :: o002 : oO : 1,000 :: L : : 00
Average: bales : bales : bales :: bales : bales : bales :: bales : bales : bales
1928-29 / : 1/ :: i :V
to : : : :: : :
1932-3: 5,394 4,563 9,957 : 1,942 :5,353 7,295 224 : 756 : 980

1932-33: 5,444 : 4,290 : 9,734 :: 2,701 : 5,169 : 7,870.:: 236 : 674 : 910
1933-34: 5,633 : 5,043 :10,676 :: 2,321 : 5,779 : 8,100 :: 273 : 853 : 1,126
1934-35: 3,680 : 6,055 : 9,735 :: 2,032 : 7,009 : 9,041 :: 253 : 1,C98 : 1,351
1935-36: 4,258 : 6,708 :10,966 :: 1,757 : 7,264 : 9,021 :: 267 : 1,103 : 1,370
1936-37:_ 3,596 7,944 :11,540 :: 1,420 : 8,593 !10,013 :: 309 : 1,179 : 1,488
Percentage of 5-year average_(1923-29 1932-33)
1936-37: 66.7 : 174.1 : 115.9 :: 73.1 : 160.5 : 137.3 :: 137.9 : 156.0 : 151.,_
Bare=a of MAricultural Economics. Compiled front reports of the New York Cotton Ex-
change Service.
I/ American cotton in running bales and foreign in equivalent bales of 478 pounds
net weight.


SEurope.- Total consumption of cotton in Europe during 1936-37 was
11,540,000 bales or slightly more than the increased consumption for tho pre-
vious year and about 16 percent more then the average for the 5 years ended with
1932-33. Consumption of American cotton declined about 16 percent from the in-
creased consumption in the previous year and was 33 percent less than the 5-year
average. But consumption of foreign cotton continued, to increase and was 74
percent above average. The small increase in total European consumption in
1936-37 resulted from the continued increases in mill activity in the United
Kingdom, Czechoslovakia and in a number of other countries, but consumption in
Spain, Germany and Poland declined considerably. prospects in curly November
are that the total European consumption of cotton during 1937-38 will be main-
talned or increased and that the consumption of knAerican probably will increase.

In the United Kingdom, total consumption of 3,040,000 bales in 1936-37
increased 7 percent but consumption of An-rican declined somewhat, following
the rather sharp increase in the previous year. Anerican cotton amounted to 38
percent of the total in 1936-37, against 46 percent in the previous year and
55 percent for tne 5-year average. The increase in cotton consuinption in 1936-37
resulted from an increased domestic buying and a moderate expansion in exports
of cotton textiles. Prospects are that i-neral business conditions in the United
Kingdom will continue favorable during 1937-38 and th:.t this will sustain domes-
tic textile buying. In addition, present indications point to a volume of cctton-
textile exports somovhat above that for 1936-37, particularly if textile exports
from Japan decrease, as now appears probable.





Cotton 10


Cotton: Mill consumption in Europe
-- -- -- -- -------- -------------------------------------- -------------------
Season : ::
begin- : United Kingdom Continent :: Continent excluding
ning : :------ Russia
A ug._l :1nerican:Foreign: Total :A merican:Foreign: Total. ::Aerican:Foreign: Total
: 1,0 1 .0O : L 1o000 : 1 000 : o000 :: 1 0 : : L. 00
Average: bales : bales : bales :: bales : bales : bales :: bales : bales : bales
to 1928-2 : : : :: : 1 / / :: : : 1

1932-33: 1,392 : 1,138 : 2,530 :: 4,002 : 3,425 : 7,427 :: 3,850 : 1,613 : 5,663

1932-33: 1,365 : 1,027 : 2,392 :: 4,079 : 3,263 : 7,342 :: 4,079 : 1,425 : 5,504
1933-34: 1,403 : 1,256 : 2,659 :: 4,230 : 3,787 : 8,017 :: 4,150 : 1,902 : 6,052
1934-35: 941 : 1,650 : 2,591 :: 2,739 : 4,405 : 7,144 :: 2,704 : 2,556 : 5,260
1935-36: 1,295 : 1,541 : 2,836 :: 2,963 : 5,167 : 8,130 :: 2,874 : 2,805 : 5,679
1936-37:_ 1,150_ .1,887 : 3,037 :: 2,446 : 6,057 : 8,503 :: 2,446 : 2,909 : 5,355
Percentage_of 5-yearaverae _(1928-29 1932-33)
1936-37: 82,6 : 165.8 : 120.0 :: _61.1 : 176.8 114.5 : _63.5 : 160.4 _94.6
Bureau of Agricultural Economics. Compiled from reports of the New York Cotton Ex-
change Service.
I/ American cotton in running bales and foreign in equivalent bales of 478 pounds
net weight.

Total mill consumption of 8,500,000 bales on the Continent increased in
1936-37 but consumption of American cotton was smaller than in the previous year
and about 39 percent less than the 5-year average. Consumption of foreign cot-
ton increased substantially and was 2,600,000 bales or 77 percent larger than the
5-year average. Cotton consumed on the Continent of Europe, except in Russia, is
practically all imported. On the Continent, excluding Russia, American cotton
was 46 percent of the total last year as compared with 51 percent in 1935-36 and
68 percent during the 5 years ended with 1932-33. Consumption of cotton other
than Aaerican increased sharply despite the substantial increase in consumption
of rayon and various other textile raw materials. Increased supplies of foreign
cotton and decreased supplies of American appeared to be primarily responsible
for the displacement of American by other growths during recent years on the
Continent of Europe. In addition, however, special trade arrangements between
certain importing countries and a few foreign cotton-producing countries appar-
ently tended to increase the use of foreign cotton relative to American cotton
in these importing countries. General business conditions on the Continent and
the outlook for textile exports indicate that the total consumption will be some-
what larger in 1937-39 than in the previous year, with prospects for an increase
in the proportion of American.

hbe Orient.- Mill consumption of all kinds of cotton in the Orient in-
creased about 11 percent during 1936-37 as compared with the previous year and
was about 37 percent larger than the average for the 5 years ended with 1932-33.
Consumption of American cotton, on the other hand, decreased 19 percent last
season and was 27 percent smaller than the 5-year average. Consumption of foreign:
cotton has increased every year since 1932-33 and in 1936-37 was 60 percent large f
than the 5-year average. Most of the American cotton consumed in the Orient i9
utilized in Japanese mills as those in China and India use native cotton almost
exclusively. Formerly China imported considerable quantities of cotton from
the Un-ited States but India has never consumed much American cotton. Unsettled







Cotton 11


Cotton: Mill consumption in the Orient

e-as-on- -------------------------------- --
Season : .: ::
begin- : Japan :: China India
ning : :: ::
Aug. 1 :American: foreign: Total ::Americ :Fopreig" Total ::American:Fojreign: Total
:1,000o : 1,000 : 1,000 :: 1,000 :P 1 000 : 1,000 :: 1, : 1,000 : 1,000
Average: bales : bales : bales :: bales : bales : Tales :: bales : bales : bales
1928-29: % : -/: 17 % W_ : 1 : T/ :: L : / :TJ
to : : : ::
1932-33: 1,345 1,418: 2,763:: 518 : 1,760 : 2,278 :: 80 : 1,953 : 2,033

1932-33: 1,847 1,087: 2,934:: 748 : 1,827 : 2,575 :: 106 : 2,105 : 2,211
1933-34: 1,857 : 1,432: 3,289:: 423 : 1,961 : 2,404 :: 41 : 2,061 : 2,102
1934-35: 1,737 1,911 "3,648:: 247 : 2,313 : 2,560 :: 39 : 2,368 : 2,427
1935-36: 1,619 : 1,930: 3,549:: 83 : 2,358 : 2,441 :: 34 : 2,454 : 2,488
1936-37: 1,367 : _2562: 3 929:: 21 : 3,040 : 3 061 :: 13 : 2,450 : 2,463
Percentage of 5-year avera-.e (1928-29 1932-33T
1936-37: 101.6 : 180.7: 142.2:: 4.0 : 12.7 : 134.4 :: 16.2 : 125.4 : 121.2
Bureau of Agricultural Economics. Compiled from reports of the New York Cotton Ex-
change Service.
1/ American cotton in running 'bales and foreign in equivalent bales of 478 pounds
net weight.

conditions in the orient make th : outlook for 1937-38 very uncertain but most
indications point to a substantial decrease in total consumption and to a material
reduction in the consumption of American as compared with the previous year. In
Japan, total consumption is expected to decline considerably, largely es a result
of reduced cotton-textile exports. Any decrease in cotton consumption in Japan
resulting from decreased exports of cotton textiles will tend to stimulate cot-
ton consumption and cotton-textile exports from Europe cnd possibly elsewhere.
Total cotton consumption in China is expected to be materially lower than in
the previous season but the upward trend in the consumption of cotton in India
is expected to continue, 3srecially if imports of cotton cloth from Japan should
decrease materially.

In Japan, total consumption of 3,900,000 bales in 1936-37 war new high,
following a slight recession in the Truvious year, ard wa~. at'c..:t 42 r'rcent
larger than the averFJie for the 5 years ended with 19.2-33. Ccnsumpti-:n of Ameri-
can cotton decrenscsd in 1936-37 for the third consecutive tine nnd re-resented
only 35 percent of total cnnsrumpticn, compared with 49 percent in the 5-year
period. Tnr.ian cotton is still the rrii.cipal competitor of Arerican cotton in
Japan but imports of sundri-s cotton ,,v-- increased substantially in. recent years,
comprisin.r 14 percent of t),'. totl-1 in 19'.-2'.7, against 7 percent durint- the 5
years ended with 1i.8-32., Eirly-seasoI ir: icitionrs ar.- that des; it.- the lower
level of cotton prices and comrnrativ:'y lurge.- stocks of cotton in Japan, total
consumption is likely to decr"-Ese mnt.:rially. Japanese -xportU f cotton tex-
tiles, which constitute moru than hslf of th--ir total requlrum-xnts for rnw cot-
ton, now (early Novoember) appear likely to decline in 1937-38, but the Jarsnese
loss in foreign textile markets will probably result in gains by other textile
exporting countries which consume consid-rablo American cotton.







Cotton 12


In China, consumption of 21,000 balos of American cotton in 1036-37
compared with an average of 520,000 bulos in toe 5 yours ended ,with 1932-33.
This decrease is due to a considerable extent to increased production of Chinese
cotton. Current estimates indicate another increase in the Chinese cotton crop
for 1937-38 but consumption in oroas whore about two-thirds of the manufacturing
capacity of Chinese mills is located practically ceased during August and Septem-
ber. Activity has apparently boon resumed in some of these mills but somo have
boon completely djstroyod. With prospects for supplies of Chinese cotton tuch
abovo Chinoso requirements for the 1937-38 season, a substantial incroaso in
exports to Japan and other cotton-consuming countries may occur if facilities
are available for shipment cut of China.

In India, the indications are thnt total mill consumption may continue
to increase during 1937-38. Imports of cotton cloth, principally from Japan
and the United Kingdom, were about one-third smaller in 1936-37 than in the
previous year and about 40 percent smaller than the 5-year average.

Other countrios.-Foreign countries outside Europe and the Orient con-
sui:iGd considerably mere cotton in 1936-37 than in the previous year and nearly
52 percent more than the avorago for the 5 years ended with 1932-33. Consumption
of American cotton during 1936-37, most of which was in Gnnada, continued to
increase and was 38 percent larger than the 5-year average. Coioumption of
cotton other than American also increased and was about 56 percent larger than
average. Increases in consumption uf native cotton in Brazil, Mexico, and the
less important cotton-producing countries in North and South Americo account
for most of the incroaso in the consumption of cotton other than American in
these countries, over the 5-year avoragc.







Cotton 13


Pr-ces a.id Income

The average price of Middling 7./8-inch cotton in the 10 designated
markets was 1.15 cents per pound higher in 1936-37 than in the previous season,
the highest seasonal average since 1929-30, and 1.?3 cents higher than the
5-year (1929-32) average. The 10-market average price of Middling 7/3-inch
cotton declined from a peak of nearly 15 cents a pound toward the end of March
to below 8 cents early in October. Associated with tnis sharp decline in
cotton prices were substantial increases in the prospective supplies of both
American and foreign-grown cottons, increases in stocks of cotton textiles
and reductions in cotton-mill activity, particularly in t:ie United States and
in the Orient, and marked declines in prices of many other raw materials and
securities. During the first 3 months of the current season, prices in the
10 markets averaged 3.03 cents lower tnan in the corresponding period a year
ago, and the average price of 7.74 oents during the vtweck Lnded Novembur 6 was
4.37 cents lower than a ye;.r earlier.

The weighted-average pricu received by producers durinL the 1936-37
season of approximately 12.3 cents was 1.2 cents more tnan for ti:e previous
season and 1.cent above the 5-year (1928-3?) -verage. With an increase of
aboutl7 percent in the size of thL. crop and 11 porctnt in price- to growers,
the gross income from the sale of cotton during the 1936-37 season was 30 per-
cent larger than in the previous season and the largest since 1929-30, but 7
percent smaller than the average for the 5 years ended with the season 1932-33.

The combined income to cotton producers from cotton and cottonseed, to-
gether with Government payments with respect to cotton in 1936-37, was 15 per-
cent larger than in the previ,:ou season, more than twice As large as in 1932-33,
and about 7 percent larger than the average for tho 5 years ended witii 1932-33-
Excluding Government payments, the gross farr incoumi from lust year'3 crop was
30 percent above thaL for the 1935 crop, 95 percent higher than the low income
from the 1932 crop, and only slightly below the 5-,ear (1928-32) average.
When adjusted for c.iangos in the prices of things farromrs bu.,, the gross farm
income from cotton and cottonseed in 1q36-37, including G3uvrnmunt Fayments,
was about 3 percent above e that of theo previous season, 60 p:rc,.nt above the
low income of 1932-33, and 14 percent above that fur the 5-year av-rage. Wi th
an increase of about 47 p-;rcint in proaucLion, gros fIar;., inco..,- from tht 1937
domestic crop, including Sovornmnjnt loans unai price adjuoitmrent ,nd conservation
payments with resp-ect to cotton, is txpucted to uq'iul or UxcLed tnut irom the
1936 crop, despite the substantial reduction in prices.






Cotton 14
Cotton: Domestic prices and income. specified periods
:Spot_rice of lint: Gross income received bysproducers from _..
: : : : : .:Total, including Governmdnft
Season :Weighted : Average : : : : payments ,
beginning :average for 10 :Cotton :Cotton :Govern-.: : Adjusted to the
August 1 :received : desig- : lint : seed ment :Actual : 1910-14 level
by : nated : : : : of prices paid
Producers: markets : : : : : by farmers
Average :Cents per:Cents per:Million:Million:Pillion :Million: Million
1928-2 to po pound : pound :dollars:dollars;dollars :dollars: dollars
1932-33 : 11.3 : 11.42 : 822.7 97.6 : --- : 920.3 : 668.2
1932-33 6.5 : 7.15 : 424.0 : 40.3 : --- a 464.3 : 450.8
1933-34 10.2 : 10.81 : 663.5 : 53.0 : 179.6 : 896.1 : 759-4
1934-35 : 12.4 : 12..36 z 595.6 : 111.4 : 115.2 : 822.2 : 652.6
1935-36 : 11.1 : 11.55 : 590.1 : 107.7 :1/160.1 858.0 : 703.3
1936-37 12.3 : 12.70 764.4 : 140.6 : 82.2 : 987.1 : 759.3
1937-38 2/: 9*3 : 9.03
1936-37 as: Percent : Percent :Percent:Percent:Perdent :Percent: Percent
percentage: 108.8 : 111.2 : 92.9 : 144.1 : --- : 107.3 : 113.6
of average:
1/ Includes price adjustment payments amounting to $39,800,000.
2/ Average of August, September, and October.
3/ Simple average of August 15, September 15, and October 15 prices.

The loan plan as announced by the Commodity Credit Cornoration on August
30 and modified on October 4, provides for loans to producers of the 1937 crop
of 9 cents per pound for Middling and better in grade of staples not shorter
than 7/8 inch, and specified smaller loans for the lower grades and/or shorter
staples. Should the proportion of the various grades and staples for the 1937
crop be approximately the same as for the 1936 crop, the qualities specified as
being eligible for loans would include about 95 percent of the crop. But only
growers who agree to cooperate in the 1938 Agricultural Adjustment Program to be
established by new farm legislation can secure these loans on their cotton even
though it may be of eligible quality. Provisions were also made for price-
adjustment payments on the 1937 crop equal to the difference between 12 cents
per pound and the average price of Midaling 7/8-inch cotton in the 10 designated
markets on the day of sale, but not to exceed 3 cents per pound. Provisions in
the announcement made in August limited these payments to 65 percent of each
producer's 1937 base production and not to exceed the 1937 production. Such
payments are to be contingent upon proof of compliance with the 1938 agricultural.
program to be enacted, and of the sale of the cotton prior to July 1, 1938.

The Commodity Credit Corporation reported that up through November 9, a
total of 1,733,000 bales were reported pledged on these Government loans.
Conditions in early November indicate that the availability &f these loans will
reduce considerably the supply of American cotton immediately available in the
markets.







Cotton 15


Prices of Indian and Egyptian cotton continued to advance in relation to
prices of American in Liverpool and in 1935-37 averaged relatively n.ihcr th..a:
during the 5 years ended with 1932-33. During tne first 3 months cf tne current
season Liverpool prices of American cotton were lower in relation to prices of
Indian and Egyptian cotton than during the 1936-37 season, and were more favor-
able to the consumption of Amurican cotton tne.n in the corresponding period in
a number of years. .

Cott-n: Spo. otprice3per po.n't o specified e cowths at Livorpool
;_ AUcual pric-s oa skot cotton : s a percentage of
Season :American: Indian :'gyptid'n:Brazilian. Aum.rican Midoling-
beginning :Widdling: Average: Uppers sSao Paulo:
August 1 : 7/8 : of 3 F.,J.F. : Fair : Indian :Egyptian :Brazilian
inch : typjs : :
Average : Cents : Cents ents : Cents :Percont :Oercent Percent
1928-29 to :
1932-33 : 13.49 10.04 : 15.86 : 13.00 : 79.0 : 118.9 : 97.7
1932-33 : 3.52 : 7.14 : 10.61 : 8.61 : 36.7 : 125.2 : 101.0
1933-34 12..47 8.87 13-77 : 12.28 : 74.0 110.8 : 98.8
1934-35 : 14.24 : 10.02 : 15.49 13-.86 72.3 : 108.8 97.4
1935-36 : 13.50 : 10.36 : 15.49 : 13.45 a 79.5 a 114.8 ? '9.8
1936-37 : 14.62 : 11.07 : 17.40 : 14.12 79.8 : 117.0 : 96.6
1937-38 2_/ : 11.02 8 79_: .0o6 : 10.81 : 35.2 : 135.8 : 7._ 7
:Percent :Percent ;Percent Percent :Percent : Percent : Percent
percentage : 82.2 : 87.5 : 95.0 : 82.6 : 107.8 : 114.2 2 9!.8
of avArage :
i/ As a percentage of American Middling and Low Middling.
2/ Average of august, September, and October.

Changes in the relative quantities of American and foreign cotton avail-
able in world channels from one season to another tend to result in material
changes in the comparative prices of thece growths, especially if these growths
differ materially in Lquality. But as prices of cotton of one growth incrpasr
or decrease in relation to prices uf other growths, the consumption of the
relatively cheap cotton tends to increase in relation to tnec tctal ccnsu.ied.
Such shifts in consumption tend to readjust the comparative prices of th: se
growths in line /with the differences in quality or spinning utility. As a re-
sult, over a period of years, th3 proportion of the total cotton consLU'ed nf a
given growth varies liroctly with th-n ratio of the supply of that grcwin to
the total supply aven though the price of it shows little or no nlot change
relative to the prices of cottons of otn:er growths.

In .ther words', ovur short, sue son-to-season periods, substantial c:,at'.~es
In the relatives supplies of cotton of different growths, particularly *-hen m. t-
erislly dissimilar in quality, tend to result in changes in tj,-rir conrm1 r:itivrJ
prices; but ov.jr lont;er periods adju-tmunts are mado in consumption, so thut tho
relative amounts of th.j various gro.,'.h's consumed beoomw adjusted to tni tntal
B'ipply of .ach. HuncL, over ptriois of tit.u long .enougn to allow thes., .Jjurt-
ments, tho rulativo quantities of &nvuricarn und furaign cotton cois.UZd .i..I-en. on
amounts 2vailablu, and tho price differuntials depend on differences .s-ini:!:ng







Cotton 16


utility. This is true not only of cottons of different growths insofar as the
represent.ditfaren3es in quality, but also of cottons of different quality (or
spinning utility) in the American crop and in the crop of any other country.

Staple Situation

The increase in total world supply of cotton in the 1937-38 season appar-
ently will be relatively greater for the short and medium staples than for the
long staples. The domestic supply of American Upland cotton of staples shorter
than 7/8 inch in 1937-38 apparently will be about 41 percent larger than in the
previous season, and about 19 percent larger than the average for the 5 years
ended with 1932-33. This increase in supply of short-staple American cotton,
along with a substantial increase in the supply of Indian and Chinese cotton,
most of which is of staples shorter than 7/8 inch, gives an unusually large total
world supply of short-staple cotton. The indicated supply of the medium staple
(7/8 to 1-3/32 inches, inclusive) American Upland cotton showed an increase of
30 percent over that of the previous season, and 17 percent over the average for
the 5 years ended with 1932-33. In addition, substantial increases in cotton
production in 1937-38 are indicated in Brazil, Russia, and other countries where
considerable quantities of the medium staples are produced. The indicated supply
of long-staple (1-1/8 inches and longer) American cotton for the season 1937-38
apparently will be about 10 percent larger than in the previous season and about
14 percent larger than the 5-year (1928-32) average. In addition, an increase is
indicated in the 1937-38 crop in Egypt, Peru, and other countries which produce
substantial quantities of long-staple cotton, with the result that the total
world supply of long staples probably will be considerably greater than in the
previous season.

Cotton: Domestic supply 1/ by staple lengths of American upland


- Stale length (inches
Shorter ; 7/8 : 15716 : 1 : 1-1/16 : 1-1/8 : 1-3/16


beginning : than : and : and and and
August 1 7/8 _299/32 31/2 1-1/2 : 332 1:
Average 1 1, 000: ,00 : : 1,000 : 1,000 : 1,000
1928-29 to I bales ; bales : bales bales : bals :
1932-33 : 2,026 : 7,349 : 4,692 : 2,744 : 1,342
1932-33 : 1,136 : 8,179 : 6,375 : 3,480 a 1,626
1933-34 723 : 6,990 : 6,197 : 3,795 1,492 :
1934-35 : 1,017 : 6,017 : 4,168 2,894 : 1,503 :
1935-36 : 1,843 : 6,004 : 4,434 : 2,679 : 1,399 :
1936-37 a 1,713 a 5,432 : 3,876 : 3,464 1,780 :
1937-38 2/:_ 2, 1 1 : 6,140 : J574. _,272 _1L96 :
: Percent -Percent sPercent :Percent :Percent :


and

1,000
bales
842
1,169
1,204
1, 233
906
923


and
_ lonEer
S 1,000
: bales
305
297
320
: 278
264
266


1,08_ 221
Percent : Percent


1937-38 as
percentage ; 119 : 94 : 122 : 156 a 144 : 129 : 72
-of average : -- --- -
/ Carry-over plus estimated production.
2/ Preliminary estimate, based on information available in early November.





2


Year






Ootton 17


cotton:. Staple premiums and discounts from prices of Middling 7/8 inch
Year : Disc./ 7 Prices : Premiums 9/
beginning : for of Mid. 15/16 : 1 : 1-1/16 ; 1-1/8 1 1-3/16 : 1-1/4
.A u a t 1 Z//16 in.: /8 d
Average, Gents Cents : Cents : Cents ; Cents : Cents $ Cents : Cents
1928-29 to
1932-33 0.52 : 11.42 : 0.34 0.83 : 1.39 : 1.88 : 2.87 : 5.82
1932-33 .21 : 7.15 a .12 -.38 : .73 1.06 : 2.01 : 4.25
1933-34 .23 & 10.81 : .22 a .62 : 1.1055 a 2.69 a 5.12
1934-35 a .36 : 12.36 : .32 .81 : 1.15 : 1.40 a 2.36 4: .79
1935-36 : .39 a 11.55 -36 .85 : 1.21 : 1.68 2.51 : 4.60
1936-37 : .84 : 12.70 .67 : 1.36 : 2.00 : 3.36 : 4-34 5-54
1937-38 / 1.16 : .0 _7_: 0 : 1. : 2. 41 : 4L 1.k .: 1 -20_.
1937-38 as : Percent Pearcent :Percent Peroent Percent :Percent* Percent:Percent
percentage a 223 : 79 : 138 : 108 : 97 : 129 : 120 a 89
of avera -
l/ Average discount at Houston, Galveston, and New Orleans.
1/ Ten-market average.
Average premiums at Memphis.
Average for August, September, and October.

piseounts for 13/16-inch staple continued to increase throughout the
1936-37 season, and in August and September 1937 were substantially greater than
the average for the previous season and were more than twice as great as the av-
erage for the 5 years ended with the season 1932-33. Prices of Indian relative
to AMeriOan cotton in Liverpool were considerably higher early in the 1937-38
S LeS1 than in the previous season and were somewhat higher than the 5-year
{1928-32) average. The relatively large world total supply of the short staples
,f'oonducive to a continuation of relatively wide discounts for 13/16 inch staples
1in comparison with prices of 7/8-inch cotton throughout most of the current season.
Premiums for staples 15/16 inch and longer increased further during the
fjrwt half of the 1936-37 season, but narrowed somewhat during the summer of 1937.
&Srly in the 1937-33 season, these premiums were on the whole about the same as in
f he corresponding p.-riod a year ago and, with the exceptions of 1-1/16 inch and
-1/4 inch staples, were substantially greater than in the 5-year (1928-32) average,
When expressed as proportions of the price- of Middling 7/3-inch cotton, premiums
for these staples were somewhat greater than a year ago and considerably greater
than the 5-year average. Prices of Brazilian Sao Paulo Fair relative to American
Middling in Liverpool early in the season 1937-38 were about the same as in the
preceding season and about the same as the average for the 5 years ended with the
Mason 1932-33. Prices of Egyptian Uppers (Iong-staple cotton) compar.-d with
prices of American Middling in Liverpool averaged substantially higher during the
early part of the 1937-38 season than a year earlier ard substantially higher than
the average for the 5 years ended with 1932-33. A continued relatively strong
d&mand for fine clothing and for industrial goods requiring long-staple cotton is
favorable to maintaining relatively high premiums for the longer stapl- cotton
throughout most of the 1937-36 season, despite the greater competition from ether
f&brlcs and technological changes which have increased the substitution of the
fhorter for the longer staples.

The relatively wide premiums for the longer staples, increased available
sUpplie, of planting seed of improved longer staple varieties, and prospects for
cla sification service to growers in communities organized for quality improve-
fltnt favor- mAincor.ase in the staple length of Auerican cotton in 1038.












Revised r.3 of the
THE COTTO.SEED OUTLOOK f10R 1938 No'v. 8 crcc report
The supply of cottonseed in the United States in 1937-39 is nov expected
to be about 8,100,000 tons, -fnich is about '7 percent larger than in 1936-37,
23 percent larger than the average for the 5 years ended 1932-37, ans'. the
largest in history. With stocks of cottonseed and cottonseed prc.lcts usually
small in comparison with production, the supplies of the various :ottonseel
products show about the same comparisons as the supplies of cottonseed. Cn
the whole, the supplies of those fats and oils that are most directly competi-
tive with cottonseed oil apparently will be about the same as or slightly
smaller than for the season 1936-37 and considerably smaller than the 5-year
average. On the other hand, the supply of feedstuffs which materially affects
the prices of cottonseed hulls and meal -ill be much larger than ln.st Ecason
but smaller than the 5-year average. The large increase over 1936-37 in the
supplies of cottonseed and cittonseed products and in feedst'.J'fs largely ac-
counts for the marked declin:- in the prices of cottonseed, cottonseed products,
and many of the important competitive rro~ cts during the last fc- months.
With supplies of cottonseed products materially larger thean in 193"-37 and with
business activity ex1-ected to be somewhat lo-'er, prices of cottonseed products
and cottonseed declined greatly during the latter part of 13)6-37 and the early
part of the current season. In Ai'gust to October the prices cf cottonseed and
most cottonseed products averaged30 to 40 percent lo0er than the 1936-37 average.

Supply and price of cottonseed and specified fats ar.' oils in the United States

Cottonseed : Cotton.eel : Lard :orn, snybean, peanut
Sl: o- crude!_ :coconut and palm oils..
Season : :eight-: : Price : : Price :Prod ic" Stocks :
beginning : : ed av-: of : of : tion :June 30:Avail-
August 1 :Supply : "rage :Supply : prime :S-'ply :refined: plus :begin- : able
: / : farm : : surm:.:er: :Chicago: not :ning of:surply
S-----------rice : yelo : : :inrt: sna._:_ _.
:Million Dollars Million Cents Million Collars MillionMillion Millio-r
5-year av.: tons por ton pounds Dpr pons i-rer pouniO s pgundi onad
192g-29 to: po-.in pounds
1932-33 : 6.6 ?1.50 1,973.5 o.92 1,771.3 10.08 1,036.4 276.8 1.313.2

1934-35 : 4.5 34.71 41,9.2 9.60) 1,070.9 12.53 1,005.4 l33.6 1,r339.0
1935-3o : 4.8 31-19 1,669.6 9.82 F90.l 13.65 1,0406,7 -2.4 1,731.1
1936-37 : 5.5 33.27 1,726.4 10.U2 999.5 12.94 1,L1.S 362.5 1,779.3
1937-38 /-: 8.1 2,138 2_'l1.. 7_ -1 _nS7J, _--9_ -
1937-35 as:Percent Percent Perc enjt PercE Unt. Pcrce-t?-t-at.r t lr .
percentage:
of average: 122.7 99.4 118.7 16.5 54.n 125-. 127.9

J/ Stocks of crude oil plus refinci r-Juced to a crule ba si-.
2/ Stocks rn Aurust 1 plus dom-st i,- prcd.ition.
3/ Storks on Auurst 1 plus production under Fed.-ral insprcticn.
_/ Preliminary ostimatcs of supply. Prices are avera,,'ea t'fo A.i-,ut, pepte''be?,
and O-tobor.






Cottonseed 2


Cotton5e_:d Oil

The indicated supply of cot.tons old oil, the principal product of cotton-
seed (thich on the average represents about 6b percent of the value of cottonsee
products) for th.o season 1937-38 is thi; largest on record, about 36 percent lari
than in 1936-37, and 19 percent larger thea'. the 5-yoar average. Not only was
there a marked increase in ti.i rcdictin cf cottonseed oil but stocks on hand.
at the beginning of the Esasrn -7,re larger tnan a -rear earlier, and larger than
the 5-yeer avera.g.. Prices of cottorns.:cd o7il in August, Se-tember, and October,
1937 r-ere about 20 uorcent below the average for 1936-37, but 7 percent above
the 5-year rvera-g. In general, irm-orts and exports of cottonseed oil have been
sm-ll in comparison -vith domestic utilization, but in the last two seasons dom-
estic prod-iction of cottonseed oil was supplemented by not imports, whereas in
e::.rlier seasons oexorts rare of considerable volume and imports were negligible.
It seems probable that again in 1937-38 considerable quantities of cottonseed
oil will be exported despite the larger produ-ction of cotton, cottonseed, and
cottonseed Troducts in foreign countries.

Cottonseed oil is used principally in the production of vegetable short-
ening an& compounds in which its chief copq-etitors -re other vegetable oils,
lard, edible tallo--s, and fish oils. The commercial supply of lard in the
1937-38 season is no-v tentatively estin ted to be slightly smaller than the co.
paratively small surncly of the previous season and only a little over half as
large as the 5-year (1928-32) average. In view of the marked reduction in for-
eign demand for and exports of lard, tie very small domestic supply does not
mean a proportional decrease in domestic competition of lnrd with cottonseed
oil. Daring the 5 years ended 1972-33, exports of lard averaged about 653,000,
pounds or 27 percent of the domestic supply, %.hereas in 1936-37 they amounted
about 100,000,000 or one-tenth of the supply. Wrnolesale prices cf lard at Chi
in August, Sentember, and October averaged about the same as during tne 12 month
ended July, 1957, and 26 p-erent higher than the 5-:rcar average.

Total donectic stocks ,n June 30, 1957 of 5 of the principal vegetable
oils which comnete more directly -ith cottonseed ril were about 2 percent small
than a year earlier but 28 percent larger than tie- 5-yuar (19?2-32) average.
stocks situation together -7ith very rcuh estimates of probable production and
imports during the cotton crop -rear indicate that the domestic supply of these
oils will not be materially different from 1936-37 but materially larger than
average.







Cottonseed 3


Hulls and Meal

Conditions in early November indicate that the supply of cottonseed cake
and meal in 1937-38 as well as the supply of cottonseed hulls will be much
larger than in 1936-37 and from one-fifth to one-third larger than the 5-year
average. In the case of cake and meal, stocks at the beginning of the season
were smaller than a year earlier. Consequently, the increased production ac-
counts for all of the increased supply. In the case of cottonseed hulls, how-
ever, at the beginning of the season stocks were much larger than a year
earlier. Prices of cottonseed hulls and meal in the first 3 months of the
current season averaged from 33 to 40 percent lower than during the previous
season and substantially lower than in the 5 years ended July 1933. The
marked increase in the supply of competing feeds (sec F"ed Outlook) has re-
sulted in the prices cf these products being substantially lower than last
year and are expected to cause prices of these products to continue materially
below those existing in 1935-37 throughout the current sLason. The larger
supplies and lower prices of competing fV.eds is one of the factors accounting
for the decline in prices of cottonseed, hulls, and meal during recent months.


Supply of cottonseed hulls, meal, and linterE in the United States


: Hulls :


Season
beginning
August 1


Price
Supply :at
1/ Atlanta
'Atlanta


Million
tons


Dollars
pe: ton


Cake and ral : Linters, F.O.B. Mi
: Price of : : Average j
Supply : meal-41% : Supply :
1/ : protein : j/ : No.2
:at M11.pnhis:
-: A'l_'li~~ -- --------.-
Mlillion Dollars Million Ccr.ts
tons rper ton running per lb.
bales


il Pts.
price of

No. 6

%C nt s
per lb.


5-year av. :
1928-29 to :
1932-33 : 1.4 9.12 2.3 26.66 1.0 3.91 1.85


1934-35
1935-36
1936-37
1937-38


1937-38 as :
percentage :
of average :


: .9 13.52
: 1.1 9.88
: 1.5 12.74
: 1.6 7.61_
:Percent Percent


114.3


83.4


1.7
1.9
2.1
2.8
Percent


123.7


32.30
22.41
34.33
2 .05
F'errent


86.5


.9
.9
1.2
1.5
Percent


150.0


5,75
5.49
5.00
4.11
Percent


105.1


4.05
3.44
3.12
2.29
Percent


123.8


/-St-ock.s on hand Aigust 1 pl's dco'tic pro ucti on.
2/ Preliminary estimate of supply and avrnk- of Autust, Stptembcr and 0,tober
prices.


:*
:*


2/




LuflivEcroa I ur rILUrIIUA
li II Hlll ll II NH111 IIHIH l ll! I1111
3 1262 08900 4229

Cottonseed 4


Linters

The supply of linters for the current cctton-marketing season is
expected to be about 25 percent larger than in the previous season and 50
percent larger than the evvrage for the 5 years 1923-29 to 1932-33. The
larger increase in the supply of linters over the 5-year average than in
the case of cottonseed is accounted for by a closer delin-ing of the seed *
during recent years in response to increased demand for cellulose. The
average prices of linters at western mill points in August, September and
October this year were materially lower than the average for 196-37 but
5 to 24 percent higher than the average for the 5-year (1928-32) average.




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