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Weekly Cotton Market Review – USDA

Ernst Undesser
From USDA November 24, 2017

Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Images

Average quotations were 97 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 68.37 cents per pound for the week ending Thursday, November 23, 2017.

The weekly average was up from 67.40 last week, but down from 71.18 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 67.57 cents Friday, November 17 to a high of 68.96 cents Wednesday, November 22.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 23 totaled 98,441 bales. This compares to 57,873 bales reported last week and 55,595 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 336,265 bales compared to 301,495 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 71.14 cents, compared to 69.18 cents last week.

Southeastern Markets Regional Summary

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

Harvest activity advanced without interruption across the lower Southeast as partly cloudy conditions prevailed over Alabama, the Florida panhandle, and Georgia during the period. Cold and dry conditions, ideal for fieldwork, were observed as a front pushed across the region over the weekend raising daytime high temperatures into the low to mid-60s. Stalks were shredded and fields were prepared for spring planting.

Fieldwork advanced at a slower pace in the upper Southeast as light scattered rainfall was observed in portions of North Carolina and Virginia during the period. Rainfall totals generally measured less than one-tenth of an inch, but the overcast and damp conditions delayed harvest activity.

Producers rushed to complete fieldwork in areas where dry conditions allowed ahead of potential wet weather. In the lower Southeast, gins operated at capacity and processed backlogs of modules. In the Carolinas, reports indicated many gins were not operating at capacity due to a shortage of available workers.

More Cotton Commentary


According to the National Agricultural Statistics Service’s Crop Progress report released November 20, cotton harvested reached 85 percent in Virginia, 84 in North Carolina, 82 in South Carolina, 78 in Georgia, and 73 percent harvested in Alabama.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 for January through October 2018 delivery. No sales were reported. Mill buyer immediate-to-nearby interest focused on receiving deliveries of previously booked 2017-crop cotton from domestic cotton shippers. Reports indicated yarn demand was strong and some mills planned to continue operations through the Thanksgiving holiday.

Demand through export channels was moderate to good. Representatives for mills in Pakistan inquired for a moderate volume of color 41, leaf 4, and staple 36 for nearby shipment. Agents throughout the Far East also inquired for discounted styles of low micronaire cotton out of West Texas.

Trading

  • Even-running lots containing color 31, leaf mostly 3, staple 36 and 37, mike 43-49, strength 30-33, and uniformity 81-83 sold for 74.00 to 75.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A moderate volume of color 31 and 41, leaf mostly 3 and 4, staple 36-38, mike 43-49, strength 29-31, and uniformity 80-83 sold for around 73.00 cents, same terms as above.
  • A light volume of color 31 and 41, leaf 3 and 4, staple 36 and 37, mike 49-52, strength 32-34, and uniformity 82-84 sold for around 72.50 cents, same terms as above.
  • A moderate volume of color 31 and 41, leaf mostly 3 and 4, staple 34 and longer, mike 37-49, strength 27-29, and uniformity 81-83 sold for around 375 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

South Central Markets Regional Summary

North Delta

Spot cotton trading was moderate. Supplies of available cotton were light. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

Cold, cloudy weather dominated during the week. Daytime temperatures were in the 50s and 60s. Overnight lows were in the 20s and 30s. Isolated showers continued to hinder harvesting of late-planted fields and producers were concerned about quality issues. Some fields were harvested and stalks were shredded.

Ginning continued without interruption, since most gins were maintaining large backlogs of modules on their yards. Several smaller gins completed annual pressing operations. According to the National Agricultural Statistics Service’s Crop Progress report released November 20, harvesting in Arkansas was 98 percent completed, 94 in Missouri, and 81 percent in Tennessee.

South Delta

Spot cotton trading was moderate. Supplies of available cotton were light. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

Clear, cold weather prevailed during the week. A storm front brought freezing temperatures during the week. Daytime temperatures were in the 50s. Overnight lows were in the 20s and 30s. Harvesting activities were delayed in some late-planted fields; producers were concerned about the condition of cotton still in the field.

Producers reported yields from 900 to 1,300 pounds per acre. Ginning progressed slowly in gins that were still operating. A number of gins completed annual pressing operations. According to the National Agricultural Statistics Service’s Crop Progress report released November 20, the crop had been 93 percent harvested in Mississippi.

Trading

North Delta

  • A moderate volume of mixed lots, color 51 and better, leaf 5 and better, staple 34 and longer, mike 37-52, strength 27-33, and uniformity 79-84 traded at around 150 points off ICE March 2018 futures, FOB car/truck (Rule 5, compression charges paid).

South Delta

  • A light volume of mixed lots, color 31 and better, leaf 3 and better, staple 38 and longer, mike 37-49, strength 29-34, and uniformity 80-84 traded at around 300 points on ICE March 2018 futures, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of mixed lots, color 41 and better, leaf 5 and better, staple 36 and longer, mike 37-52, strength 27-33, and uniformity 77-84 traded at around 100 points on ICE March 2018 futures, same terms as above.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was active. Supplies were moderate. Producer offerings were light. Demand was very good. Average local spot prices were steady. Trading of CCC-loan equities was active. Domestic and foreign inquiries were moderate. Interest was best from India, Pakistan, and Turkey.

Ginning was winding down in south and east Texas. Weather conditions allowed harvesting to expand in Kansas and Oklahoma. Sources estimated approximately 35 percent of the crop was off the stalk in Kansas. Most Kansas gins were operating with the exception of one. The Abilene Classing Office estimated between 170,000 to 200,000 bales were expected from Kansas.

All gins were operating in Oklahoma. The Oklahoma crop has the potential to produce an estimated 1 million bales. Local industry representatives estimated 40 to 50 percent of the crop was harvested. Sources reported harvesting progress was slow, but steady due to increased acreage for harvest and reliance on custom harvesters. Most gins will operate through Thanksgiving Day.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was very good. Average local spot prices were firm. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was slow. Foreign inquiries were good and for low micronaire cotton. Interest was best from India, Pakistan, and Turkey.

High humidity and foggy conditions slowed harvesting early in the reporting period. A hard frost was received early in the period, which most producers were waiting for. Ideal weather mid-week allowed harvesting to gain momentum. Harvesting went on late into the night.

Local sources estimated harvesting to be around 30 to 40 percent completed. Ginning continued; a few gins were temporarily idle, having processed all of the modules on their yards. Many gins will operate on Thanksgiving Day. Cottonseed prices were reported at $120 to $165 per ton.

Trading

East Texas

  • In Texas, a moderate volume of mostly color 31 and better, leaf 3 and better, staple 33-35, mike 42-49, strength 26-32, and uniformity 78-82 sold for around 64.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of color 51 and better, leaf 3 and better, staple 35-38, mike 46-53, strength averaging 29.2, and uniformity averaging 81.4 sold for around 65.00 cents, same terms as above.
  • A light volume of color 31 and 32, leaf 3 and 4, staple mostly 34, mike averaging 48.9, strength averaging 32.0, and uniformity averaging 81.9 sold for around 62.00 cents, same terms as above.
  • A light volume of color 41 and 51, leaf 4-6, staple 31-33, mike averaging 50.2, strength averaging 28.3, and uniformity averaging 79.9 sold for around 60.00 cents, same terms as above.
  • In Oklahoma, a heavy volume of mostly color 21 and 31, leaf 3 and better, staple 37 and longer, mike 35-44, strength averaging 30.7, and uniformity averaging 81.1 sold for around 73.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of mostly color 31, leaf 4 and better, staple 36 and longer, mike averaging 45.0, strength averaging 30.5, and uniformity averaging 81.5 sold for around 71.00 cents, same terms as above.
  • A moderate volume of mostly color 21, leaf 3 and 4, staple 35-37, mike averaging 34.5, strength averaging 28.4, uniformity averaging 79.0, with 25 percent bark sold for around 67.75 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 13.50 cents.

West Texas

  • A moderate volume of color mostly 21 and better, leaf 3 and better, staple 37 and 38, mike 35-45, strength averaging 30.0, and uniformity averaging 80.0 sold for 70.00 to 72.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 31, leaf 3 and better, mostly 36 and 37, mike averaging 43.7, strength averaging 30.2, and uniformity averaging 80.1 sold for around 70.00 cents, same term as above.
  • A moderate volume of mixed quality lots of mostly color 31 and better, leaf 3 and better, staple 34 and 35, mike 35-42, strength averaging 28.5, and uniformity averaging 80.0 sold for 67.25 to 69.00 cents, same terms as above.
  • A moderate volume of mostly color 31 and better, leaf 3 and better, staple 35 and longer, mike averaging 32.5, strength averaging 29.9, and uniformity averaging 79.5 sold for 62.00 to 64.50 cents, same terms as above.
  • A moderate volume of CCC-loan equities traded for 14.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

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

Mild weather conditions advanced harvesting and ginning in Arizona. Harvesting was reported to be 75-85 percent completed. Foggy conditions in the Safford Valley slowed harvesting early in the reporting period. Ginning neared completion in Yuma, Arizona. All other Arizona gins were operating at capacity. Most gins planned on closing Thursday during the day for Thanksgiving, but some were scheduled to operate Thursday night.

Field activity consisted of shredding stalks and preparing fields for winter plantings. Excellent weather conditions advanced harvesting and ginning in New Mexico and El Paso, Texas. Temperatures were mostly in the 60s and 70s. Some modules were stored in fields or transported to gin yards. Harvesting gained momentum.

Sources estimated 40 percent of the crop was harvested in New Mexico and nearly 50 percent in El Paso, Texas. Cottonseed sales were active in New Mexico and El Paso, Texas, with most seed going to local dairies. Cottonseed prices were $175 to $190 per ton.

San Joaquin Valley (SJV)

Spot cotton trading was slow. Supplies were light. Demand was moderate. Producers delivered 2017-crop cotton to the coop, merchant marketing pools, or into the CCC loan program. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were slow. Interest was best for saw-ginned Acala.

Daytime temperatures were mostly in the high 60s to low 70s. Foggy conditions and traces of moisture was received early in the period. Snowfall was received in elevations over 8,000 feet in the Sierra Nevada Mountain range. Harvesting was virtually completed. Ginning continued uninterrupted. Producers shredded stalks and readied fields for winter plantings.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best from China. Shippers’ price ideas were higher.

Temperatures were in the 70s to 80s in Arizona, California, New Mexico, and El Paso, Texas. Harvesting continued in Arizona, New Mexico, and El Paso, Texas. No rainfall was recorded in the period. Harvesting neared completion in Arizona and California. Ginning gained momentum. Cottonseed prices were reported at $160 per ton for New Mexico and El Paso, Texas.

Trading

Desert Southwest

  • A light volume of color 11, leaf 1&2, and mostly staple 38 and longer, mike averaging 38.0, strengthaveragin g 31.0, and uniformity averaging 80.2 sold for around 72.00 cents per pound, uncompressed, FOB warehouse.

San Joaquin Valley

  • A light volume of color 31 and better, leaf 3 and better, and staple 36 and longer was sold for around 84.50 cents per pound, UD free, FOB warehouse.

American Pima

  • No trading activity was reported.
Ernst Undesser
From USDA November 24, 2017