1. Cotton Economic Outlook National Cotton Council Mid-Year Board Meeting July 9-12, 2006

2. W. Texas Crude Oil Price

3. Global Economy Solid performance in the first half of 2006 Weakening expected in the second half  High energy prices, rising interest rates, cooling housing market UN currently estimating ’06 growth at 3.6%  Similar to last year’s level

4. Change in U.S. Real GDP

5. US Federal Budget Surplus

6. 2006 US Planting Intentions 2005 Actual 2006 USDA Percent Change Southeast3,0303,35510.7% Mid-South3,9504,2056.5% Southwest6,2796,8008.3% West716580-19.0% Total Upland13,97514,9406.9% ELS27033624.3% All Cotton14,24515,2767.2%

8. US Cotton Condition Index 10-Yr Hi 10-Yr Lo ‘04 (855 #/ac) ‘05 (831 #/ac) ‘06

9. US Cotton Production

10. US Cotton Retail Market Domestic Imported

11. US Cotton Textile Imports

12. Monthly US Cotton Mill Use

13. US Export Performance Shipments Outstanding Sales

14. US Cotton Use Mill Use Exports

15. China Cotton Supply & Use

16. Beginning Stocks54.053.0 Production114.1114.4 Imports43.744.0 Mill Use116.8121.8 Exports43.343.4 Ending Stocks53.047.5 Stocks-to-Use Ratio45.4%40.0% World Supply and Demand 2005/062006/07

17. Beginning Stocks5.56.5 Production23.920.5 Imports0.00.0 Total Supply29.427.0 Mill Use6.05.5 Exports17.016.6 Total Offtake23.022.1 Ending Stocks6.54.9 Stocks-to-Use Ratio28.3%22.2% US Supply and Demand 2005/062006/07

18. Cotton Stocks-to-Use U.S. World less China

19. Cotton Stocks/Use vs A(NE) Index

20. Factors to Watch Bullish  Dry conditions in W. Texas & parts of SE and Delta  Demand in excess of 120 million bales  Declining stocks in 06/07  Uncertainty over China’s stocks Bearish  More acres in ’06  05/06 ending stocks in US  Can economic growth be sustained?  China’s trade position & quota allocations

21. MerchantsGinners Cottonsee d ProducersCooperatives WarehousesManufacturers