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Weekly Cotton Market Review – USDA

Ernst Undesser
From USDA May 19, 2017

Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Images

Average quotations were 420 points higher 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 78.53 cents per pound for the week ending Thursday, May 18, 2017.

This is the highest weekly average since June 19, 2014 when the average was 79.26 cents. The weekly average was up from 74.33 last week and 59.81 cents reported the corresponding period a year ago. Daily average quotations ranged from a season high of 81.76 cents Monday, May 15 to a low of 76.56 cents Thursday, May 18.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 18 totaled 4,198 bales. This compares to 3,507 bales reported last week and 5,849 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,560,874 bales compared to 1,437,971 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 79.24 cents, compared to 79.18 cents last week.

Prices are in effect from May 19-25, 2017

  • Adjusted World Price (AWP) – 72.44
  • ELS Competitiveness Payment – 0.00
  • Loan Deficiency Payment (LDP) – 0.00
  • Fine Count Adjustment 2016 Crop – 0.09
  • Coarse Count Adjustment (CCA) – 0.00
  • Fine Count Adjustment 2017 Crop – 0.24
    Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #4 FOR UPLAND COTTON May 18, 2017

The Department of Agriculture’s Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. The quota will be established on May 25, 2017, allowing importation of 13,588,518 kilograms (62,411 bales) of upland cotton.

Quota number 4 will be established as of May 25, 2017, and will apply to upland cotton purchased not later than August 22, 2017, and entered into the U.S. not later than November 20, 2017.

The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2016 through February 2017, the most recent three months for which data are available. Future quotas, in addition to the quantity announced, will be established if price conditions warrant.

Regional Summaries

Southeastern Market

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

Widespread thunderstorms brought from trace amounts to around one-half of an inch of precipitation to areas across the lower Southeast early in the period, with slightly heavier accumulations observed along Atlantic coastal areas. Producers welcomed the moisture in areas of southeast Alabama and south Georgia where moderate-to-extreme drought conditions persisted.

Planting activity advanced the remainder of the period as hot and dry conditions dominated the weather pattern with daytime highs in the upper 70s to lower 90s. Sporadic rainfall caused stands to emerge unevenly in some dryland fields in south Georgia, according to local experts. Producers increased irrigation schedules in fields that experienced below-average rainfall.

Similar conditions were observed in the Carolinas and planting was briefly interrupted as weekend thunderstorms brought around one-half of an inch to one inch of moisture to most cotton growing areas. Fieldwork resumed as warm and sunny weather prevailed during the remainder of the week. Good emergence was observed in the earliest-planted fields and producers were encouraged to monitor seedlings for the presence of thrips; no heavy insect pressure was reported.

In Virginia, a recent period of wet weather and unseasonably cool weekend temperatures in the mid-50s to mid-60s delayed planting. Fieldwork advanced during the week as clear and warm conditions returned.

Cotton Commentary


According to the National Agricultural Statistics Service’s Crop Progress report released May 15, planting was 59 percent completed in Alabama, 52 in South Carolina, 40 in Virginia, 38 in Georgia, and 31 percent completed in North Carolina.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Scattered showers brought from trace amounts to around one-half of an inch of moisture to areas of northeast Arkansas, west Tennessee, and the Bootheel of Missouri at the beginning of the period. Clear weather returned over the weekend and mostly clear to partly cloudy conditions prevailed across the region during much of the remainder of the week.

Sunny weather and hot daytime temperatures in the upper 80s to lower 90s helped soft soils to firm. The ideal conditions allowed planting to advance at a rapid pace as producers raced to complete fieldwork ahead of additional wet weather forecast to return to the region over the weekend. Some previously flooded low-lying areas had to be cleared of debris and soil deposits before replanting.

In Arkansas, reports indicated that seedling disease was evident in some of the earliest-planted fields due to cool and wet conditions in recent weeks. Local experts encouraged producers to scout fields for early-season pests such as cutworms and thrips in young seedlings.

According to the National Agricultural Statistics Service’s Crop Progress report released May 15, planting advanced to 51 percent in Arkansas, 48 in Missouri, and 35 percent completed in Tennessee.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Scattered thunderstorms brought around one-quarter of an inch to one-half of an inch of moisture to areas across the region early in the period. Fieldwork was delayed, particularly in low-lying areas that remained saturated due to heavy rainfall and flooding in recent weeks. In Louisiana, local experts reported the damp conditions and cool overnight soil temperatures observed in recent weeks has favored seedling disease and reduced plant vigor in some of the earliest-planted fields.

During the week, clear and warm conditions with daytime high temperatures in the mid-80s allowed soils to firm and planting activity to resume at a rapid pace. Producers were attempting to complete outside activities ahead of wet weather forecast to return to the region over the weekend.

According to the National Agricultural Statistics Service, planting advanced to 84 percent completed in Louisiana and 51 percent in Mississippi.

Southwestern Markets

East Texas-Oklahoma

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

Stands developed and had begun to bloom in the Rio Grande Valley. Scouting for plant pests was underway and some treatments were applied for red spider mites. Cotton had begun to square in the Upper Coast. Local experts reported wind damage to most stands. A few fields were treated for fleahoppers. Beneficial rainfall was needed.

In east-central Texas, some replanting had been done, but sowing was completed. Rainfall is needed to help all crops mature. Soil moisture declined. Local reports indicated that in the northern Blackland Prairies, stands have stalled at the 5 and 6 true leaves stage and need moisture to progress. All fields have been treated for plant pests and have been fertilized.

In Kansas, rainy, cool conditions prevailed and slowed planting activities. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on May 15, planting had advanced to 2 percent.

In Oklahoma, planting expanded and some fields had emerged. Additional rainfall was received in some areas that enhanced soil moisture. Planting had reached 33 percent, up 15 points from the previous year, and 15 points higher compared to the five-year average, according to NASS.

West Texas

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

Planting advanced with daytime temperature highs in the mid-80s to low 90s, and nighttime lows in the upper 50s to low 60s. Planting in some counties must be completed by May 31 to be eligible for full insurance coverage. Irrigated stands had begun to emerge. Some fields were watered.

Gusty winds persisted and spotty thunderstorms brought beneficial moisture to localized areas. Some storms were severe, but no stand damage was reported. Replanting in the panhandle had been reported on fields that received snowfall three weeks ago.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies were light. Demand was light. Average local prices were higher. No domestic mill activity was reported. Foreign mill inquiries were light.

Hot, dry conditions advanced the Arizona crop. The Yuma crop made good progress. The crop was squaring and blooming continued. Some bolls were sighted. Local experts reported that heat units were near normal levels for this time of year. Fields in central Arizona made good progress, with some of the earliest-planted fields showcasing the first pinhead squares.

No significant pest pressures were reported. Red flag warnings were in effect for areas in central Arizona, southeastern New Mexico, and into El Paso, Texas due to gusty winds and low humidity. No measurable moisture was recorded for the DSW in the period. The crop progressed normally in New Mexico and El Paso, Texas.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Partly cloudy conditions kept temperatures in the low 70s. No moisture was recorded in the period. Overall, the crop looked good, but growth was slowed by cool conditions. Extension agents reported that heat units were below normal for this time of year. Some seedling diseases were found and thrips populations were building.

Producers cultivated fields and checked soil moisture levels as afternoon winds continued. Central Valley water officials managed water releases from local dams and monitored river outflows, all to avoid flooding in low-lying areas. Cooler temperatures slowed the melting of the Sierra Nevada Mountain snowpack. Producers attended the SJV Cotton Production Symposium on May 16 and 17.

American Pima (AP)

Spot cotton trading was inactive. Supplies were light. Demand was good. Average local spot prices were steady. Producers inquired for new-crop contracts. No domestic mill activity was reported. Foreign mill inquiries were good and mostly for new-crop. Shippers offering prices were firm for old and new-crop cotton.

Temperatures were in the 90s for Arizona. Cooler temperatures in the 70s were prevalent in the San Joaquin Valley. Red flag warnings were in effect for areas in central Arizona, southeastern New Mexico, and into El Paso, Texas due to gusty winds and low humidity. No measurable moisture was recorded for the Desert Southwest in the period. Local sources reported the crop made excellent progress in Yuma, Arizona.

The crop was producing squares and blooming. Some bolls were sighted. Crop progress slowed in the San Joaquin Valley as cooler temperatures entered the region. Producers were advised to manage and monitor the crop in its early growth stages because of vulnerability to seedling diseases and insect pressures.

Central Valley water officials managed water releases from local dams and monitored river outflows to avoid flooding in low-lying areas. Cooler temperatures slowed the melting of the Sierra Nevada Mountain snowpack. Producers attended the SJV Cotton Production Symposium on May 16 and 17.

Textile Mill

Domestic mill buyers purchased a moderate volume of 2017-crop cotton, color 52 and better, leaf 5 and better, and staple 32 and longer for October through December delivery. Mill buyers also inquired for a moderate volume of 2017-crop cotton, color 41, leaf 4, and staple 34 and longer for fourth quarter delivery.

No additional sales were reported. Most mills have covered their raw cotton needs through the near term. Demand for open-end and ring-spun yarns was moderate. Most mills operated four to seven days.

Demand through export channels was moderate. Indonesian mill buyers purchased a moderate volume of 2017-crop cotton, color 31, leaf 3, and staple 35 for November shipment. Turkish mill buyers purchased a moderate volume of 2017-crop cotton, color 31, 41, and 42, leaf 3, and staple 33 for November through January 2018 shipment.

Peruvian mill buyers purchased a moderate volume of USDA Green Card Class, 2017-crop cotton, color 41 and 42, leaf 4, and staple 35 and 36 for October through December shipment. Vietnamese mill buyers inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 35 for June/July shipment. Japanese mill buyers inquired for a light volume of USDA Green Card Class, color 31, leaf 3, and staple 36 for September/October shipment. No additional sales were reported.

Regional Price Information

Southeastern Markets

  • A light volume of color 31 and 41, leaf 3 and 4, staple mostly 35 and 36, mike 43-52, strength 29-32, and uniformity 80-82 sold for around 73.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color 31 and 41, leaf 3 and 4, staple 34-36, mike 43-52, strength 27-30, uniformity 80-83, and containing approximately 25 percent extraneous matter sold for 67.00 to 68.00 cents, same terms as above.

South Central Markets

North Delta

  • No trading activity was reported.

South Delta

  • No trading activity was reported.

Southwestern Markets

East Texas

  • In Oklahoma, a mixed lot containing a heavy volume of mostly color 21 and 31, leaf 3 and 4, staple 35-37, mike 33-48, strength 26-33, and uniformity 78-83 sold for around 80.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 32 and better, leaf 4 and 5, staple 35 and 36, mike 41-43, strength 28-29, uniformity averaging 81.5, and 25 percent extraneous matter sold for around 73.50 cents, same terms as above.

West Texas

  • A heavy volume of color 21 and 31, leaf 2 and 3, staple 36 and longer, mike 23-42, strength 26-32, and uniformity 77-83 sold for around 80.50 cents per pound, FOB car/truck (compression charges not paid).

Western Markets

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A moderate volume of 2016-crop cotton, color 2 and better, leaf 2, and staple 46 and longer was sold to foreign mills for prompt shipment.
  • A heavy volume of 2017-crop cotton, color 2, leaf 2, and staple 46 and longer was booked at around 130.00 to 132.00 cents per pound, UD free, FOB warehouse, with fixed differences paid for quality lower than base quality.
Ernst Undesser
From USDA May 19, 2017