2. 2017 – Year in Review
Cotton prices stronger relative to competing crops
Large world production & ending stocks
Growth in world GDP
Increased demand for cotton

3. U.S. Balance Sheet 15/16 16/17 17/18 18/19 Change Production 12.89
Million Bales
15/16
16/17
17/18
18/19
Change
Production
12.89
17.17
21.26
Mill Use
3.45
3.25
3.35
Exports
9.15
14.92
15.00
Stocks
3.80
2.75
5.50
Stocks/Use
30%
15%

4. NCC Acreage Survey Distributed on Dec 15
Responses collected through mid-January
Asked for acres of upland cotton, ELS cotton, corn, soybeans, wheat, other crops in ‘17 and intentions for ’18
also asked about price expectations

5. Pre-Planting Market Signals
Cotton
Corn
Soybeans
Cot/Corn
Cot/Soy
2018
74.12¢
$3.83
$9.79
19.4
7.6
2017
73.53¢
$3.91
$10.08
18.8
7.3
2016
59.68¢
$3.84
$8.92
15.5
6.7
2015
65.00¢
$4.13
$9.72
15.7
2014
78.57¢
$4.66
$11.44
16.9
6.9
2013
83.18¢
$5.70
$12.84
14.6
6.5
2012
92.08¢
$5.65
$12.59
16.3
2018: average Nov 18’/Dec 18’ futures 12/15/17 – 01/15/18, : average Jan-Mar Nov/Dec contract price

6. Pre-Planting Market Signals

7. 2018 Southeast Acreage 2017 Actual 2018 Intended % Change Alabama 435
439
0.8%
Florida 99
106
6.9%
Georgia
1,280
1,287
0.6%
North Carolina
375
406
8.2%
South Carolina
250
258
3.4%
Virginia 84 87
3.1%
Southeast
2,523
2,582
2.3%
Total may not add due to rounding.

8. 2018 Mid-South Acreage 2017 Actual 2018 Intended % Change Arkansas 445
466
4.7%
Louisiana
220
214
-2.6%
Mississippi
630
596
-5.5%
Missouri
305
317
3.8%
Tennessee
345
350
1.5%
Mid-South
1,945
1,943
-0.1%
Total may not add due to rounding.

9. 2018 Southwest Acreage 2017 Actual 2018 Intended % Change Kansas 93
144
55.3%
Oklahoma
585
708
21.0%
Texas
6,900
7,154
3.7%
Southwest
7,578
8,007
5.7%
Total may not add due to rounding.

10. 2018 West Acreage 2017 Actual 2018 Intended % Change Arizona 160 138
-13.5%
California 88 78
-10.8%
New Mexico 66 76
14.6%
West
314
293
-6.8%
Total may not add due to rounding.

11. 2018 ELS Acreage 2017 Actual 2018 Intended % Change Arizona 15 20
31.6%
California
215
212
-1.3%
New Mexico 8
4.8%
Texas 14
2.9%
ALL ELS
252
254
1.0%
Total may not add due to rounding.

12. U.S. Cotton Production 16/17 17/18 18/19 Change Planted (Mil Ac) 10.07
12.62
13.08
0.46
% Un-harvested
5.6%
10.1%
15.4%
5.3%
Harvested (Mil Ac)
9.51
11.35
11.07
-0.28
Yield
867
899
842
-57
Production (Mil Ba)
17.17
21.26
19.42
-1.84

14. U.S. Balance Sheet 15/16 16/17 17/18 18/19 Change Production 12.89
Million Bales
15/16
16/17
17/18
18/19
Change
Production
12.89
17.17
21.26
19.42
-1.84
Mill Use
3.45
3.25
3.35
3.41
0.06
Exports
9.15
14.92
15.00
14.33
-0.67
Stocks
3.80
2.75
5.50
7.04
1.54
Stocks/Use
30%
15%
40%

15. China Balance Sheet 15/16 16/17 17/18 18/19 Change Production 22.0
Million Bales
15/16
16/17
17/18
18/19
Change
Production
22.0
22.8
26.4
26.3
-0.1
Mill Use
35.0
37.5
40.0
41.8
1.8
Imports
4.4
5.0
5.5
0.5
Stocks
58.2
48.4
39.8
29.8
-10.0
Stocks/Use
166%
129%
99%
71%

16. China Ending Stocks
Million Bales

17. China Cotton Balance Sheet
Million Bales

18. World Balance Sheet 16/17 17/18 18/19 Change Production 106.6 121.0
Million Bales
16/17
17/18
18/19
Change
Production
106.6
121.0
119.3
-1.7
Mill Use
114.8
120.8
124.8
4.0
Trade
37.2
38.4
39.0
0.6
Stocks
87.6
82.2
-5.4
China
48.4
39.8
29.8
-10.0
All Others
39.2
47.8
52.4
4.6

19. Ending Stocks Outside of China
Million Bales

20. World Cotton Trade ‘12-16 Avg 17/18 18/19 World Trade 39.66 38.37
Million Bales
‘12-16 Avg
17/18
18/19
World Trade
39.66
38.37
39.00
U.S. Exports
11.77
15.00
14.33
Trade Share
29.7%
39.1%
36.7%

21. Cotton Prices

22. Final Thoughts U.S. export sales and shipments for ’17 marketing year
Large ending stocks in key exporting countries
China’s re-entry as a large importer at some point
India’s price support policies
Mill use in the current macroeconomic environment and competition from man-made fiber

23. Seed Cotton Program Reference Price = $0.367/lb Seed Cotton Price
Weighted average of lint and cottonseed prices
Payment Yield Update
Option to update the upland cotton CCP lint yield based on 90% of the actual yield not counting years in which cotton was not grown
Establish Base Acreage
(1) Convert generic base to seed cotton base (higher of 80% of generic base
or planted cotton acres (not to exceed generic)
(2) Reallocate all generic base to seed cotton & other commodity bases
according to shares of ‘09-12 planted

24. NCC Education Program
NCC will launch an education process beginning with webinars on Feb 19-20
More information will be provided next week