Cotton Economic Update National Cotton Council Mid-Year Board Meeting Aug 22-24, 2007

W. Texas Crude Oil Price

Index of Prices Paid

Southeast3,353 2, Mid-South 4,235 2, Southwest6,835 5, West ALL UPLAND 14,948 10, ALL ELS ALL COTTON15,274 11, U.S. Cotton Acreage % Actual Intentions* Change Thousand Acres *USDA-NASS

Crop Futures Prices ’06’07Ratio Jan-Mar Avg Cotton (Dec)$0.593$0.588 Corn (Dec)$2.45$ Soybeans (Nov)$6.15$ Wheat (Jul)$3.92$

Ratio of Futures Prices

U.S. Cotton Production

U.S. Cotton Retail Consumption

Consumption Expenditures

U.S. Cotton Retail Consumption

U.S. Cotton Mill Use

India Cotton Supply & Use

Brazil Cotton Supply & Use

Cotton Production & Use (Foreign less China)

China Cotton Supply & Use

U.S. Cotton Exports

World Cotton Production & Use

Cotton Stocks-to-Use

Nearby NY and “A” (FE) Index

Looking Forward  Bullish Factors  Production below use  Stocks tighten  Continued competition for available acres

December Cotton Futures Cents per Pound

December Corn Futures Cents per Bushel

November Soybean Futures Cents per Bushel

Ratio of Futures Prices

Looking Forward  Bullish Factors  Production below use  Stocks tighten  Continued competition for available acres  Bearish Factors  Expanding production in other countries (India)  Maintaining demand at higher price levels

Price Indices

Looking Forward  Bullish Factors  Production below use  Stocks tighten  Continued competition for available acres  Bearish Factors  Expanding production in other countries (India)  Maintaining demand at higher price levels  Wild cards  Relying on China to buy 40-50% of US crop  General economic performance

MerchantsGinnersCottonseed Producers Cooperatives WarehousesManufacturers