Keep marketing option open

The new millennium is ushering in an almost forgotten word in the cotton industry: bullish. Last used in January 1996 to describe the remnants of "dollar cotton," let's not allow ourselves to be overwhelmed by the use of the word. The bottom line is not how the futures market may climb, but the net

USDA's May Supply Demand Report traditionally provides us with the first glimpse of its view of both U.S. and world conditions for the upcoming season. While U.S. crop conditions are knocking on the market's door with the potential of a 19 to 19.5 million-bale crop, world demand is idly strutting by with the intention of kicking in the door.

The initial USDA estimates for the 2000/01 marketing season allow for a 19 million bale U.S. crop, 10.2 million bales of domestic textile use and exports of 8 million bales. They forecast total demand for U.S. cotton to be 18.2 million bales, a full 1.5 million bales greater than the current year's 16.7 million bales. Yet, even with such strong demand, carryover of U.S. cotton stocks is expected to increase 800,000 bales. Thus, based on U.S. conditions, it is difficult to be optimistic about cotton prices during the coming season.