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Weekly Cotton Market Review – USDA

Ernst Undesser
From USDA August 18, 2017

Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Photography

Average quotations were 245 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 65.91 cents per pound for the week ending Thursday, August 17, 2017.

The weekly average was down from 68.36 last week, and 66.94 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 66.92 cents Friday, August 11 to a season low of 65.36 cents Thursday, August 17. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 17 totaled 4,904 bales.

This compares to 3,563 bales reported last week and 761 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 10,555 bales compared to 6,825 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 67.45 cents, compared to 69.26 cents last week.

Southeastern Markets Regional Summary

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

Partly sunny to overcast conditions prevailed across the entire Southeast during the period with daytime high temperatures in the upper 80s to lower 90s. Day-to-day showers brought 1 to 3 inches of weekly accumulated moisture to areas of south Alabama, the Florida panhandle, and Georgia.

The wet weather interrupted fieldwork in some areas and delayed the timely application fungicide and other products. The crop progressed well under the hot and humid conditions and bolls had begun to crack open in some of the earliest planted fields. However, crop maturity lagged in some areas and producers would welcome a period of warm and sunny weather to invigorate plants and advance the crop.

In Georgia, whiteflies had begun to appear in cotton and producers were applying treatments before fields become infested. Producers sprayed fields with insecticides to control foliage feeders in Alabama.

Thundershowers brought around 1 to 2 inches of rainfall to areas of eastern North Carolina early in the period. Fieldwork was suspended in some areas due to the spotty rainfall and waterlogged soils from excessive moisture received in recent weeks. The crop advanced under the hot conditions and bolls had begun to crack open in the Carolinas. Fields were treated for worm infestations in North Carolina. Insect pressure was mostly light and easily controlled in South Carolina and Virginia.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress Report released August 14, squaring neared completion and cotton setting bolls reached 91 percent completed in Virginia, 90 in Alabama, 87 in Georgia and North Carolina, and 76 percent completed in South Carolina. NASS also reported the crop condition was mostly good to excellent in South Carolina and fair to good elsewhere in the Southeast.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2016-crop cotton, color 31 and 41, leaf 3, and staple 36 and longer for nearby through fourth quarter 2017 delivery. Mill buyers also inquired for a moderate volume of 2017-crop cotton, color 51 and better, leaf 5 and better, and staple 34 and longer for first and second quarter 2018 delivery.

No sales were reported. Demand for ring-spun yarn had improved and was good; open-end yarn was moderate. Most mills operate five to seven days.

Demand through export channels was good. Representatives for mills in Taiwan purchased a moderate volume of USDA Green Card Class, 2017-crop cotton color 31, leaf 3, and staple 36 for January through March 2018 shipment. Agents for several mills in Thailand and Vietnam inquired for a moderate volume of USDA Green Card Class, 2017-crop cotton color 31 and 41, leaf 3, and staple 36 and longer for November 2017 through March 2018 shipment.

South Central Markets Regional Summary

North 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. No forward contracting was reported.

Mostly cloudy and warm conditions characterized the weather pattern during the week. Overcast skies with intermittent showers, interspersed with heavy thunderstorms, brought about 1 inch of precipitation and high humidity to the Memphis territory. Daytime temperatures were in the 90s and overnight lows were in the 70s.

Cotton extension specialists reported that there was some concern about boll retention, due to the wet and cloudy conditions. Producers were advised to closely scout fields for target spot and bacterial wilt. Fields were also scouted for bollworms and plant bugs. Chemicals were applied to control outbreaks in late-maturing cotton fields. A few fields had reached cut-out.

The crop made normal progress, in most cases, across the region. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 14, cotton setting bolls reached 99 percent in Arkansas, 83 in Missouri, and 91 percent in Tennessee. NASS reported that bolls were opening in Arkansas and Tennessee; the crop condition in Arkansas was rated at 84 percent good to excellent, compared with 57 in Missouri and 86 percent in good to excellent condition in Tennessee.

South 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 inactive. No forward contracting was reported. Mostly wet, cloudy, and hot weather conditions prevailed during the week.

A series of thunderstorms brought 1 to 2 inches of precipitation to several areas, with 3 to 4 inches in places that received heavier amounts. Many fields were saturated, with more rain in the forecast.

Producers were hoping for an extended period of clear, warm weather to allow saturated soils to dry. Many fields had reached the cut-out stage. Daytime temperatures were in the 90s and overnight lows were in the 70s. The crop made good progress across the region. Local experts reported that boll retention was a concern due to the heavy rain and cloudy conditions experienced over the previous two weeks.

Fields were scouted for evidence of target spot, bacterial blight, and boll rot; no damage was reported. Insect pressure was mostly light. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 14, cotton setting bolls reached 98 percent in Louisiana and 87 percent in Mississippi.

NASS reported that 78 percent of the crop was in good to excellent condition in Louisiana, compared to 72 percent in Mississippi; 19 percent of the acreage in Louisiana had open bolls, compared to 6 percent in Mississippi.

North Delta

  • No trading activity was reported.

South Delta

  • No trading activity was reported.

Trading

East Texas

  • In Texas, a light volume of mostly color 31 and 41, leaf 3 and 4, staple 34 and 35, mike 38-45, strength 25-29, and uniformity 79-83 sold for around 70.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of color 31 and 41, leaf 2-4, staple mostly 34 and 35, mike 38-48, strength 26-31, and uniformity 77-82 sold for around 66.50 cents, same terms as above.
  • A heavy volume of color mostly 31, leaf 2 and 3, staple 33 and 34, mike averaging 42.9, strength averaging 27.6, and uniformity averaging 78.7 sold for around 63.50 cents, same terms as above.

West Texas

  • No trading activity was reported.

East Texas

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

Harvesting and ginning continued in south Texas, the Upper Coast, the Coastal Bend, and the Rio Grande Valley. Modules lined fields waiting for transport to the gin yards. Reports indicated a backlog of cottonseed was present on gin yards. Most gins were operating at capacity. Producers were encouraged by the quality results.

In central Texas, cotton root rot was reported in some fields. Rainfall continued intermittently in some areas. Defoliation and boll openers were applied in the Blackland Prairies. Bolls cracked opened. Some ginners expected modules to be transported to the gin yards as early as next week.

In Kansas, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 14, squaring had reached 80 percent, compared to 84 percent last year, and cotton setting bolls was 37 percent, same as last year. Bolls opening was at 2 percent. Local reports indicated that good rains helped advance the crop and that fields previously struggling gained vigor. Overall, the crop was estimated about a week later than normal.

In Oklahoma, squaring was 98 percent compared to 96 percent last season, and cotton setting bolls was 60 percent compared to 50 percent last year, according to NASS. Bolls opening was 2 percent. Recent rainfall and cooler temperatures were timely on the late planted stands. Plant growth regulators were applied as needed. Meetings were attended.

West Texas

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was very light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light.

In the Northern and Southern High Plains, summertime rainfall brought up to 6 inches of beneficial moisture to the crop. Stands varied in progress with some late planted fields that had begun to bloom, and some that had begun to set bolls. Fieldwork was at a standstill because soils were too soggy to support equipment. Irrigated fields advanced and wells remained shut off. Monitoring fields for pests was interrupted but the focus was on aphids, lygus, and bollworms.

In parts of the Southern High Plains and the western edges of the Rolling Plains, pockets of hot, sunny weather persisted and patches of late planted acres had begun to bloom. Yields will be impacted by the performance of the late planted crop, according to local reports.

Approximately seven-tenths of an inch of rainfall was received on some stands that helped reduce fruit shedding, but some isolated areas remained parched. Dryland held on but needs more rainfall to prevent further fruit loss. Irrigation water was applied.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

No trading activity was reported.

American Pima

  • No trading activity was reported.

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

In central Arizona, thunderstorms deposited one-half of an inch to two and one-half inches of rainfall early in the reporting period. Defoliation continued in Yuma, Arizona. Harvesting advanced. Sources reported the crop was about 10 to 15 percent harvested. Modules were transported to the gin yard. Ginning was expected to begin the week of August 28. Defoliation activities continued in central Arizona.

Treatments for cotton rust to prevent yield loss were reported in eastern Arizona, New Mexico, and in El Paso, Texas along the river. Thunderstorms produced around one-half of an inch of rainfall early in the period for New Mexico and around one-tenth of an inch in El Paso, Texas. Local sources reported plenty of irrigation water and light bug pressure. A few late-planted fields in the El Paso, Texas area struggled. Overall, the crop made good progress.

San Joaquin Valley (SJV)

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

No rainfall was recorded in the period. Hot, dry conditions advanced crop progress. Some of the earliest-planted fields had bolls cracking open. Ginners and producers prepared equipment for the impending harvest.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were good for new-crop cotton. The crop made good progress in Arizona, California, New Mexico, and El Paso, Texas.

Harvesting was active in Yuma, Arizona. Ginning was expected to begin in late September. Sources reported early-planted fields in the San Joaquin Valley had bolls cracking open.

Ernst Undesser
From USDA August 18, 2017