World Real GDP Growth IMF, January 2013

NCC Acreage Survey Distributed on Dec 18 Responses collected through Jan 23 Asked for acres of upland cotton, ELS cotton, corn, soybeans, wheat, Other crops in ‘12 and intentions for ’13; also asked price expectations

Pre-Planting Market Signals CottonCornSoybeansCot/CornCot/Soy ¢ $5.92$ ¢ $5.65$ ¢ $5.88$ ¢ $4.04$ ¢ $4.17$ ¢ $5.36$

U.S. Cotton Area & Prices

2013 Southeast Acreage 2012 Actual 2013 Intended % Change Alabama Florida Georgia 1,2901, North Carolina South Carolina Virginia Southeast 2,7482, Total may not add due to rounding.

2013 Mid-South Acreage 2012 Actual 2013 Intended % Change Arkansas Louisiana Mississippi Missouri Tennessee Mid-South 2,0301, Total may not add due to rounding.

Arkansas Crop Returns

2013 Southwest Acreage 2012 Actual 2013 Intended % Change Kansas Oklahoma Texas 6,5504, Southwest 6,9115, Total may not add due to rounding.

2013 West Acreage 2012 Actual 2013 Intended % Change Arizona California New Mexico West Total may not add due to rounding.

2013 ELS Acreage 2012 Actual 2013 Intended % Change Arizona California New Mexico Texas ALL ELS Total may not add due to rounding.

% Changes in Futures Prices

U.S. Cotton Production

U.S. Balance Sheet 10/1111/1212/1313/14Change Production Mill Use Exports Stocks Stocks/Use14%23%31% Million Bales

Cotton’s Share of U.S. NDC

Apparel Import Per-Unit Values

Net Domestic Fiber Consumption

U.S. Balance Sheet 10/1111/1212/1313/14Change Production Mill Use Exports Stocks Stocks/Use14%23%31% Million Bales

Int’l Area (Excluding China)

Int’l Mill Use (Excluding China)

Yarn Export Values – Cotton Price

Fiber Prices

Yarn Export Values – Cotton Price

China Cotton Yarn Imports

China Cotton Use

China’s Reserves: The Big Unknown 12/1313/14Change Mill Use Production Gov’t Purchases Gov’t Sales Stocks Gov’t Reserves Imports Million Bales

World Cotton Trade

U.S. Balance Sheet 10/1111/1212/1313/14Change Production Mill Use Exports Stocks Stocks/Use14%23%31%25% Million Bales

World Balance Sheet 11/1212/1313/14Change Production Mill Use Trade Stocks China Reserves Other Stocks Million Bales

Cotton Trade Balance Production less Use Outside China China Imports Difference 2010/ / / / Buy & Sell Buy & Hold Million Bales

Summary Points Resistance breaking out of recent price range – China reserves a key factor – Sustaining demand Smaller U.S. acreage & production in ‘13 – Remember: $6 corn & $13 soybeans resulted from severe drought; markets could change quickly – ‘14 could look much different

Questions Going Forward

Growth in China Fiber Mill Use? China’s 5-Year Plan

Shifts in Cotton Mill Use?

Markets for U.S. Cotton?