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Weekly Cotton Market Summary – USDA

Ernst Undesser
From USDA November 3, 2017

Weekly Cotton Market Summary – USDA

©Debra L Ferguson Stock Images

Average quotations were virtually the same as 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 66.92 cents per pound for the week ending Thursday, November 2, 2017.

The weekly average was up from 66.91 last week, but down from 68.14 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 66.61 cents Friday, October 27 to a high of 67.34 cents Thursday, November 2.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 2 totaled 38,785 bales. This compares to 23,247 bales reported last week and 23,957 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 117,707 bales compared to 102,902 bales the corresponding week a year ago. The ICE December settlement prices ended the week at 69.08 cents, compared to 68.19 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #2 FOR UPLAND COTTON November 2, 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 November 9, 2017, allowing importation of 12,803,341 kilograms (58,805 bales) of upland cotton.

Quota number 2 will be established as of November 9, 2017, and will apply to upland cotton purchased not later than February 06, 2018, and entered into the U.S. not later than May 07, 2018. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period June 2017 through August 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.

Southeastern Markets Regional Summary

Spot cotton trading was moderate. Supplies were moderate. Demand was moderate. Producer offerings were light. Average local spot prices were weak.

Fieldwork and harvesting activity was briefly interrupted in areas throughout the Southeast as a frontal system brought around one-quarter of an inch of moisture to areas from the Gulf Coast to the eastern Carolinas. Sunny conditions returned early in the week and mostly clear to partly cloudy conditions prevailed. Seasonably cold daytime temperatures in the upper 50s to lower 60s warmed to the mid-70s to lower 80s late week. Harvesting advanced across the region.

In Georgia, the aerial application of defoliants was still underway, but cooler temperatures had slowed desiccation of later-planted cotton. Yields of 1,200 to 1,400 pounds per acre were reported on some irrigated acreage; yields of 750 to 1,100 pounds per acre were reported on some dryland fields.

In Alabama, some fields remained a couple of weeks behind as the crop progressed and bolls continued to crack open throughout the state. Harvest activity advanced at a rapid pace in the Carolinas and Virginia as fieldwork remained uninterrupted.

According to the National Agricultural Statistics Service’s Crop Progress report released October 30, harvesting was 66 percent completed in Virginia, 54 in South Carolina,46 in Georgia, and 53 percent completed in Alabama and North Carolina.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41 and better, leaf 4 and better, and staple 34 and longer for second quarter 2018 delivery. No sales were reported. Mill buyers and domestic cotton shippers were busy scheduling deliveries of previously booked 2017-crop cotton. Most mills operated four to seven days.

Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted or low grade styles of cotton.

Trading

  • A light volume of color 41 and better, leaf 4 and better, staple 34 and longer, mike mostly 37-49, strength mostly 30-34, and uniformity 79-85 traded at around 73.55 cents per pound, Georgia terms, FOB car/truck (Rule 5, compression charges paid).

South Central Markets Regional Summary

North Delta

Spot cotton trading was moderate. Producers were steadily delivering previously contracted cotton. Supplies of available cotton were light. Demand was moderate. Average local spot prices were weak. Trading of CCC-loan equities was inactive. No forward contracting was reported.

More Cotton Commentary


Cold and partly cloudy conditions characterized the weather pattern during the week. Daytime temperatures were in the 50s and 60s. Overnight lows were in the 30s. Damp conditions returnedlate week and further delayed outdoor activities. Ginning continued without interruption, since most gins had large backlogs of modules on their yards.

Producers were harvesting cotton and shredding stalks in fields dry enough to support equipment. Reported yields ranged from 900 to 1,400 pounds per acre. According to the National Agricultural Statistics Service’s Crop Progress report released October 30, harvesting in Arkansas was 82 percent completed, 81 in Missouri, and 65 percent in Tennessee.

South Delta

Spot cotton trading was moderate. Producers were steadily delivering previously contracted cotton. Supplies of available cotton were light. Demand was moderate. Average local spot prices were weak. Trading of CCC-loan equities was slow. No forward contracting was reported.

Clear and cold conditions early in the week allowed producers to make good progress harvesting and ginning. A warm, moist air mass brought rain showers and milder temperatures late week. Daytime temperatures were in the 50s to 80s. Overnight lows were in the 20s to 60s.

Harvesting activities were briefly delayed throughout the region; producers were concerned about the effect of the wet weather on fiber quality. The cold, wet weather inhibited the effectiveness of defoliants in a few fields. Producers reported yields as high as 1,300 pounds per acre. Ginning progressed slowly, but steadily. Producers were forced to wait until fields dried sufficiently to support equipment to continue harvesting and shredding stalks.

According to the National Agricultural Statistics Service’s Crop Progress report released October 30, the crop in Louisiana had been 94 percent harvested, compared to 77 percent in Mississippi.

Trading

North Delta

  • A moderate volume of color 41 and better, leaf mostly 5 and better, staple 35 and longer, mike 33-42, strength 29-31, and uniformity 81-84 traded at around 250 off ICE December futures, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of CCC-loan equities traded for around 14.00 cents.

South Delta

  • A light volume of color 31 and better, leaf 3 and better, staple 35 and longer, mike averaging 44.5, strength averaging 30.7, and uniformity averaging 81.0 traded at around 100 points on ICE December futures, FOB car/truck (Rule 5, compression charges paid).
  • A moderate volume of mostly color 42 and better, leaf 5 and better, staple 36 and longer, mike 37-49, strength 27-32, and uniformity 79-82 traded for around 25 points on ICE December futures, same terms as above.
  • A light volume of color 41 and better, leaf 5 and better, staple 35 and 36, mike 48-53, strength 29–33, and uniformity 79-82, and 25 percent extraneous matter (bark) traded at around 150 off ICE December futures, same terms as above.
  • A moderate volume of CCC-loan equities sold for 12.00 to 14.00 cents.

Southwestern Markets Regional Summary

East Texas

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

Harvesting neared completion in the Upper Coastal and Blackland Prairie counties. Modules were hauled from fields to gin yards as space became available. Ginning continued. Stalk destruction was underway, but was briefly interrupted by light, intermittent rainfall. Cottonseed prices paid to the producers were reported at $95 to $140 per ton, depending on quality.

The Corpus Christi Classing Office continued to operate two shifts and has graded more than 1.6 million samples for producers in south Texas, the Rio Grande Valley, and east Texas.

In Kansas and Oklahoma, a cold front early in the reporting period brought cooler conditions, rain, and gusty winds. Harvesting continued uninterrupted. Modules began to accumulate on gin yards and some gins launched operations. Harvesting was 12 percent completed in Kansas, and 32 percent completed in Oklahoma, according to the National Agricultural Statistics Service’s Crop Progress report released on October 30.

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 light.Trading of CCC-loan equities was inactive. Foreign inquiries were moderate to heavy. Interest was best from China, Taiwan, and Turkey.

A cold front moved into the region early in the reporting period with daytime temperature highs in the mid-40s to low 80s. Overnight temperatures were in the low 30s to low 50s. Outside conditions were breezy with gusts near 30 miles per hour, which helped leaves fall from plants. Light rainfall was received on October 31 that slowed harvesting activities.

Eastern New Mexico received light snowfall and a wintry mix that briefly halted fieldwork. A warming trend returned that allowed harvesting and ginning to expand. Some gins added night shifts for around-the-clock operations. Modules were transported from fields to gin yards. Three module fires were reported in different locations that caused extensive damage to modules and some cotton still on the stalk, according to local reports.

Irrigated acres that have been harvested were watered for winter wheat. The Abilene, Lamesa, and Lubbock Classing Offices added additional shifts to keep pace with the incoming volume of samples to be graded. Cottonseed prices paid to the producers were reported at $125 to $150 per ton.

Trading

East Texas

  • A heavy volume of color 31 and better, leaf 3 and better, staple 36 and longer, mike 40-48, strength 27-32, and uniformity 78-83 sold for 69.00 to 70.00 cents per pound, FOB warehouse (compression charges not paid).
  • A mixed lot containing a light volume of color 54 and better, leaf 4 and better, staple 36 and longer, mike 45-50, strength 28-32, uniformity 80-82, and 50 percent extraneous matter sold for around 60.50 cents, same terms as above.
  • A mixed lot containing a moderate volume of color mostly 52 and better, leaf 4 and better, staple 34 and 35, mike 44-52, strength 28-34, uniformity 80-82, and 50 percent extraneous matter sold for around 59.00 cents, same terms as above.
  • In Oklahoma, a light volume of mostly color 32 and better, leaf 3 and 4, staple 36 and 37, mike 44-48, strength 28-30, and uniformity 81-82 sold for around 68.50 cents, FOB car/truck (compression charges not paid).

West Texas

  • A moderate volume of mostly color 31 and 41, leaf 4 and 5, staple 39 and 40, mike 34-41, strength 29-31, uniformity 80-82, and 25 percent extraneous matter sold for around 68.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 31 and 32, leaf 3 and better, staple 35 and longer, mike 42-47, strength averaging 29.5, and uniformity 76-81 sold for around 66.00 cents, same terms as above.
  • A light volume of mixed lots containing mostly color 42 and 43, leaf 4 and better, staple 34 and longer, mike 33-36, strength 25-27, uniformity 76-78, and 75 percent extraneous matter sold for around 59.00 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC loan program. Average local prices were steady. No domestic mill activity was reported. Foreign mill inquiries were light.

Partly cloudy skies and moderate temperatures were prevalent in Arizona. Rainfall was recorded in the period. Harvesting was active in central Arizona. Producers were shredding stalks. In Safford, Arizona, defoliation advanced, but harvesting was slow as producers determined that the crop was not quite ready. Quality results of Arizona cotton were good.

Temperatures were mostly in the 60s and 70s for New Mexico and El Paso, Texas. Scattered showers were reported early in the period. Harvesting was slowed. Modules were transported to gin yards. Ginning was initiated.

San Joaquin Valley (SJV)

Spot cotton trading was slow. Supplies and demand were light. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC loan program. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the 80s for most of the week. Rain is in the near-term forecast. Harvesting was on-going. Stalk shredding was active. Ginning continued without interruption.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. Producers inquired for contracts. No forward contracting or domestic mill activity were reported. Foreign mill inquiries were moderate. According to the Foreign Agricultural Service export sales report, approximately 389,800 bales of 2017-crop AP was committed for the week ending October 26, 2017.

Temperatures were in the 70s to 80s in Arizona, California, New Mexico, and El Paso, Texas. Defoliation and harvesting activities were on-going for the region. Arizona producers were pleased with yield results and yields were near average. Ginning was active.

Trading

Desert Southwest

  • A heavy volume of 2017-crop Arizona cotton for contract base quality color 21, leaf 2, and staple 36 and longer was contracted at around 150 points on ICE December futures.

San Joaquin Valley

  • A moderate volume of mostly color 31, leaf 2 and better, staple 37 and longer, mike 37-49, strength 32-33, and uniformity 81-83 traded for around 80.00 cents, UD free, FOB warehouse.

American Pima

  • No trading activity was reported.
Ernst Undesser
From USDA November 3, 2017