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Weekly Cotton Market Review – USDA

Ernst Undesser
From USDA March 17, 2017

Weekly Cotton Market Review – USDA

Texas A&M AgriLife photo by Dr. Jourdan Bell

Average quotations were 34 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton and Tobacco Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, uniformity 81.0-81.9) in the seven designated markets averaged 74.50 cents per pound for the week ended Thursday, March 16, 2017.

The weekly average was down from 74.84 last week, but up from 56.52 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 73.94 cents Monday, March 13 to a high of 75.09 cents Thursday, March 16.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 16 totaled 32,767 bales. This compares to 36,009 bales reported last week and 45,424 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,455,679 bales compared to 1,326,965 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 78.17 cents, compared to 77.82 cents last week.

Prices are in effect from March 17-23, 2017

  • Adjusted World Price (AWP) – 67.92
  • ELS Competitiveness Payment – 0.00
  • Loan Deficiency Payment (LDP) – 0.00
  • Fine Count Adjustment 2015 Crop – 0.06
  • Coarse Count Adjustment (CCA) – 0.00
  • Fine Count Adjustment 2016 Crop – 0.16
    Source: Farm Service Agency, FSA, USDA

Regional Summaries

Southeastern Market

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive.

Partly cloudy to overcast conditions prevailed from the Gulf Coast to the upper Southeast entering the period with unseasonably warm daytime temperatures in the low to mid-70s. Widespread showers brought around one-quarter of an inch to one inch of moisture to areas across the entire region, with locally heavier totals observed in areas of the coastal Carolinas and Virginia.

Sunny, cold, and windy conditions prevailed early week as a cold front entered the region and daytime highs plummeted to the mid-40s and overnight lows dipped near or below freezing. Producers attended local meetings and considered spring planting options.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was slow. A light volume of forward contracting was reported.

Seasonably cold climatic conditions prevailed during the week. Another storm brought a wintry blend of snow and sleet to northern areas, with rain reported in the rest of the region. Accumulations of up to 3 inches of mixed rain and snow were reported, creating hazardous driving conditions. Daytime temperatures were in the 30s and 40s. Overnight lows were in the 20s and 30s.

According to the U.S. Drought Monitor, the impact of all the moisture will not be fully accessed until next week, but soil moisture conditions will clearly improve. Field activities were at a standstill due to inclement weather.

South Delta

Cotton Commentary


Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported.

Winter-like temperatures and scattered precipitation prevailed during the week. Daytime temperatures were in the 40s to 50s. Overnight lows were in the 30s. Another winter storm brought more rainfall to some places during the period. According to the U.S. Drought Monitor, while improvements were made in southern Louisiana, some degradation resulted in northern Louisiana where moderate drought and abnormally dry conditions expanded. Producers booked a light volume of cotton as they finalized plans for the upcoming planting season. No fieldwork was reported due to wet soil conditions and cold temperatures.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. Producer interest in forward contracting was good. Trading of CCC-loan equities was active. Foreign inquiries were heavy. Interest was best from China, Brazil, Indonesia, and Thailand.

In the Rio Grande Valley (RGV) and south Texas, rainfall of up to 5 inches interrupted planting early in the reporting period, with the heaviest amounts in the Coastal Bend. Approximately 70 percent was planted in the RGV and 30 percent around Corpus Christi.

Seedlings emerged and some stands were established. Reports indicated that 6 true leaf cotton was noticeable. Scouting for plant pests was active. Industry experts reported an expected 25 percent increase in planted acres.

In the Blackland Prairies, scattered showers were received early in the reporting period that interrupted corn and sorghum planting. The subsoil moisture is good ahead of cotton planting.

In Kansas, recovery efforts continued following a wildfire on March 6 that burned burr piles, modules, and cotton bales, according to local news sources. High winds spurred fires to build. Ginning neared the end with approximately 300 bales to process.

In Oklahoma, ginning neared completion, and was expected to finish the first week of April. Producers were encouraged by phenomenal yields with some dryland fields that had produced more than 2 bales per acre. A 25 percent increase in planted acres was expected for next season.

West Texas

Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher.

Producer interest in forward contracting was good. Trading of CCC-loan equities was active. Interest was best from China, Brazil, Indonesia, and Thailand.

Sunny, windy conditions prevailed. Soil moisture levels continued to be depleted. Rainfall was spotty. Daytime temperature highs were in the mid-60s to low 80s. Nighttime lows were in the mid-20s to mid-40s. Weed problems compounded under warm outside conditions.

Spraying for weeds and fertilizer applications were underway. Ginning neared completion. Meetings covering different topics, including irrigation workshops, were conducted throughout the region.

Agricultural individuals, businesses, animal pharmaceuticals, feed stores, trucking companies, and governmental agencies joined forces to assist producers and ranchers that were devastated by the deadly wildfires that charred around 750,000 acres across 8 counties, and more than 1 million acres in Texas, Kansas, and Oklahoma.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Producers inquired for 2017-crop contracts. A few contracts were signed. Average local prices were lower. No domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the high 80s to low 90s in Arizona. Planting continued in Yuma. Seedlings made excellent progress. Most seedlings were at the cotyledon stage. Temperatures warmed into the high 70s in New Mexico and El Paso, Texas. Water releases from Caballo reservoir are scheduled to begin on March 31 and will allow pre-plant irrigations to begin. Fieldwork was active in the DSW.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were lower. Producers inquired for 2017-crop contracts. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the low 70s with daytime high temperatures reaching the mid-80s late in the period. Accumulated heat units were rising indicating that soil temperatures at planting depth were reaching optimal conditions. No planting was reported. Flood advisories remained in effect for Fresno and Madera Counties, due to water releases from local dams.

Higher-than-normal March temperatures contributed to melting the Sierra Nevada Mountain snowpack; insuring continuous river and stream flows. Low-lying fields, towns, and earthen levees remain at risk for flooding in the SJV. Fieldwork was active. Fertilizer and pre-emergent herbicide were applied.

American Pima (AP)

Spot cotton trading was inactive. Supplies were light. Demand was good. Average local spot prices were steady. Producers inquired for 2017-crop contracts. No contracts were signed.

Mostly sunny skies and above-average temperatures were prevalent for Arizona, California, New Mexico, and El Paso, Texas. No rainfall was recorded in the period. Planting continued in Yuma, Arizona. Seedlings made excellent progress. Ginning continued in the San Joaquin Valley. No planting was reported in California.

Water releases from Caballo reservoir are scheduled to begin on March 31 and will allow pre-plant irrigations to begin in New Mexico and El Paso, Texas. Local sources reported that producers are considering to plant less AP, as the water releases may be too late for some producers. Pre-plant preparations continued in Far West. The classing office continues to receive samples for grading from gins in Arizona and California.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 41, leaf 4 and better, and staple 35 for June delivery. Mill buyers also booked a moderate volume of 2017-crop cotton, color 41, leaf 4, and staple 34 and longer for November 2017 through May 2018 delivery. Demand for nearby fill-in needs was light. No additional sales were reported. The undertone from mill buyers was unsettled as demand through retail sectors was sluggish. Most mills operated four to seven days.

Demand through export channels was moderate. Agents for mills in Indonesia, Taiwan and Vietnam inquired for a moderate volume of USDA Green Card class, color 31, leaf 3, and staple 36 for nearby shipment. No sales were reported.

Regional Price Information

Southeastern Markets

  • Mixed lots containing color mostly 51, leaf 3 and 4, staple mostly 35 and longer, mike 47-50, strength 28-31, and uniformity 81-83 sold for around 75.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color 42 and 52, leaf 3-5, staple mostly 35 and 36, mike 47-49, strength 27-30, and uniformity 80-82 sold for 73.25 cents, same terms as above.

South Central Markets

North Delta

  • A light volume of color 42 and better, leaf 4 and better, staple 37 and 38, mike averaging 51.8, strength averaging 33.1, and uniformity averaging 83 traded at around 67.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • Producers booked a light volume of 2017-crop acres for CCC-loan equities for 17.00 to 19.00 cents.

South Delta

  • A light volume of color 42 and better, leaf 7 and better, staple 35 and longer, mike averaging 36.7, strength averaging 30.6, and uniformity averaging 80.9 with 50 percent extraneous matter (bark) traded at around 65.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • Producers booked a light volume of 2017-crop acres for CCC-loan equities for 17.00 to 19.00 cents.

Southwestern Markets

East Texas

  • In Oklahoma, a light volume of color 31 and 41, leaf 4 and better, staple 36 and longer, mike 35-52, strength 28-32, and uniformity 78-81 sold for around 73.50 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of color 32 and better, leaf 2 and 3, staple 35 and longer, mike 30-52, strength 26-31, uniformity 78-82, and 25 percent extraneous matter sold for around 72.75 cents, same terms as above.
  • Mixed lots containing a light volume of mostly color 33, leaf 3 and 4, staple 36 and longer, mike 29-43, strength 27-31, uniformity 79-81, and 100 percent extraneous matter sold for around 70.00 cents, same terms as above.
  • In Oklahoma, a moderate volume of CCC-loan equities traded for 17.25 to 20.00 cents.

West Texas

  • A heavy volume of color 31, leaf 3 and better, staple 37 and longer, mike 35-49, strength 28-33, and uniformity 79-83 sold for around 75.50 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of mostly color 21 and 31, leaf 3 and better, staple 36 and longer, mike 35-49, strength 27-33, and uniformity 77-83 sold for around 75.00 cents, same terms as above.
  • A moderate volume of color 31 and 41, leaf 3-5, staple 35-37, mike 41-50, strength 27-29, uniformity 78-82, and 75 percent extraneous matter sold for around 72.50 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 17.75 to 19.25 cents.

Western Markets

Desert Southwest

  • A light volume of 2017-crop Arizona cotton for contract base quality color 21, leaf 2, and staple 36 and longer was booked at around even on ICE December futures.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.
Ernst Undesser
From USDA March 17, 2017