These loss adjustments, which over the last four seasons have added up to no less than 6.4 mio bales, highlight the uncertainty that exists in regards to Chinese statistics. With these latest adjustments, the USDA has in essence adopted the consumption numbers put forth by the China Cotton Association last month, which amounted to 9.38 mio tonnes for 2005/06 and 10.44 mio tonnes for 2006/07.
Today's USDA numbers calculate at 9.33 mio tonnes for 2005/06 (45.0 mio bales use less 2.15 mio adjustment) and 10.45 mio tonnes (50 mio bales use less 2.0 mio adjustment). What may seem strange here is that the USDA is not using a straightforward consumption number and instead uses an inflated mill use number with a subsequent adjustment.
On the economic front, we continue to see almost unbridled optimism as we head into the Holiday Season. Today the Federal Reserve said consumer spending and demand for services quickened across the U.S. last month, despite widespread cooling in the housing market.
The Fed's "Beige Book" cited solid back-to-school sales in three districts, a pick-up in up-scale merchandise in New York and quicker apparel sales in Boston, Cleveland and San Francisco.The labor market is seen as 'tight' in several districts, and some regions mentioned a shortage of skilled workers.It sure looks like the US consumer is proving its skeptics wrong again?
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