Recent price movement

All benchmark prices except the CC Index increased over the past month.

Prices for the March NY futures contract surged in late December， rising from 75 cents/lb to just below 80 cents/lb. Following that round of increases， there was a period of stability. However， in the latest trading， prices have risen once again， with March futures testing levels near 85 cents/lb. Current prices are the highest for a nearby NY futures contract since May.

As is common， movement in the A Index was highly correlated with that for NY futures， with values increasing from levels near 85 cents/lb in late December to those near 90 cents/lb most recently.

The China Cotton Index （CC Index， base grade 3128B） was stable over the past month. In international terms， the CC Index held to levels near 109 cents/lb. In domestic terms， the CC Index eased slightly， falling from 15，800 to 15，700 RMB/ton.

Indian spot prices （Shankar-6 quality） increased， climbing from 75 to 81 cents/lb in international terms over the past month. In domestic terms， prices increased from 38，000 to 40，000 INR/ candy.

Pakistani prices also rose， moving from 75 to 84 cents/lb in international terms and from 6，600 to 7，600 PKR/ maund in domestic terms.

Supply， Demand， & Trade

This months USDA report featured increases in global figures for both production （+1.0 million bales， from 120.0 to 121.0 million） and mill-use （+1.2 million bales， from 119.6 to 120.8 million）. The slightly larger increase in consumption relative to production resulted in slightly lower forecast for global ending stocks（-0.2 million bales， from 88.0 to 87.8 million）.

Both before and after this months revision， at the country-level， the only major producer or consumer of cotton expected to have a significant year-overyear decrease in stocks in 2017/18 is China （-8.7 million bales， from 48.4 to 39.8 million）. For the world-less-China， ending stocks are projected to increase 8.8 million bales （from 39.2 to 48.0 million）.

Notable country-level changes to harvest figures included those for China（+1.4 million bales， from 25.0 to 26.4 million）， India （-200，000， from 29.5 to 29.3 million）， the U.S. （-177，000， from 21.4 to 21.3 million）， and Australia（-100，000， from 4.7 to 4.6 million）.

For consumption， the only notable country-level change to mill-use figures was for China （+1.0 million bales， from 39.0 to 40.0 million）. In China， mill-use is now expected to grow 2.5 million bales year-over-year. Countries outside of China with significant year-over-year growth include Vietnam （+850，000， from 5.4 to 6.3 million）， India （+750，000， 24.0 to 24.8 million）， and Bangladesh （+500，000， from 6.7 to 7.2 million）. Globally， milluse is forecast to grow 6.2 million bales year-over-year， representing the strongest increase in bale volume since 2009/10 and a growth rate （+5.2%） more than double the long run average （near two percent）.endprint