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Weekly Cotton Market Activity – USDA

Ernst Undesser
From USDA January 12, 2018

Weekly Cotton Market Activity – USDA

©Debra L Ferguson Stock Photography

Average quotations were 88 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 76.84 cents per pound for the week ending Thursday, January 11, 2018.

The weekly average was up from 75.96 last week and from 71.46 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 75.61 cents Friday, January 5 to a seasonal high of 79.96 cents Thursday, January 11. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 11 totaled 148,565 bales.

This compares to 75,044 bales reported last week and 89,020 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,067,016 bales compared to 873,030 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 82.65 cents, compared to 79.25 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. Producers took advantage of higher ICE futures during the period to book a light volume of 2018-crop cotton.

Cold and mostly cloudy conditions prevailed over the lower Southeast early in the period with daytime highs in the mid-40s to low 50s. Up to 1 inch of scattered precipitation was received in areas throughout Alabama and portions of west Georgia early week. Overcast conditions were observed later in the week as a mass of warm and moist air settled over the region and daytime highs warmed into the upper 60s.

Fieldwork was interrupted by the wet weather throughout the period. Producers welcomed the precipitation, which should help improve soil moisture levels. Abnormally dry to moderate drought conditions existed throughout Alabama and Georgia, according to the U.S. Drought Monitor. Clear and cold conditions were observed in the Carolinas and Virginia over the weekend with frigid daytime highs in the low-to-mid 30s.

Warmer weather conditions were observed later in the week with daytime highs in the upper 60s to low 70s and light scattered rainfall was observed in some locales. Fieldwork was completed where soils were firm enough to support equipment. Gins continued to process backlogs of modules throughout the region.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 41, leaf 5, and staple 35 and longer for April/May delivery. Mill buyers also inquired for a heavy volume of 2017 and 2018-crop cotton, color 41, leaf 4, and staple 34 and longer for third and fourth quarter 2018 delivery. No sales were reported. Most mills operated five to seven days.

More on Cotton


Demand through export channels was moderate. Agents for mills in Turkey purchased a moderate volume of color 31, 41 and 51, leaf 3-5, and staple 37 and longer for March/April shipment. Agents throughout the Far East inquired for any discounted styles of low mike cotton.

Trading

  • A light volume of color 21 and 31, leaf 2 and 3, staple 36-38, mike 43-49, strength 28-31, and uniformity 81-83 sold for 475 to 525 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • Mixed lots containing color 21, 31 and 41, leaf 2 and 3, staple 35-37, mike mostly 43-49, strength 29-32, and uniformity 81-83 sold for around 375 points on ICE March futures, same terms as above.
  • A moderate volume of color mostly 31 and 41, leaf 2-4, staple 33 and longer, mike 37-49, strength 27-30, and uniformity 80-82 sold for around 275 points on ICE March futures, same terms as above.
  • A moderate volume of color 31 and 41, leaf 2 and 3, staple 34, mike 43-52, strength 25-27, and uniformity 80-82 sold for around 50 to 75 points on ICE March futures, same terms as above.

South Central Markets Regional Summary

North Delta

Spot cotton trading was steady. 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. Cotton was being delivered to fulfill contracts.

A flow of warm, moist air brought overcast skies and sporadic rain showers to the region during the week. Daytime temperatures were in the 50s and 60s. Overnight lows were in the teens and 40s. Less than 1 inch of precipitation accumulated in most areas. Freezing temperatures were in the short-term forecast. Ginning was winding down throughout the region.

The Dumas Classing Office had a single shift operating as necessary. The Memphis Classing Office also continued operating one shift on a day-to-day basis, because a few gins in the Memphis territory continued to operate. Outdoor activities were halted due to cold, wet conditions.

Producers made plans to attend regional and national industry meetings. According to the U.S. Drought Monitor, moderate-to-severe drought conditions persisted in Arkansas and the Bootheel of Missouri; soil moisture conditions were adequate in the cotton-producing areas of Tennessee.

South Delta

Spot cotton trading was slow. 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. Cotton was being delivered to fulfill contracts.

Climatic conditions were erratic. Warm, moisture-laden air entered the area during the period, which provided relief from the frigid weather the previous week. Daytime temperatures were in the 50s and 60s. Overnight lows were in the teens and 40s. Less than 1 inch of total precipitation was reported in most areas. Another cold front was in the nearby forecast.

Several larger gins were still pressing cotton in Mississippi. Outdoor activities were idle due to cold, wet conditions. Producers attended various industry meetings, including the Beltwide meetings in San Antonio, Texas. According to the U.S. Drought Monitor, moderate-to-severe drought existed in northeastern Louisiana and most of Mississippi.

Trading

North Delta

  • A moderate volume of color 51 and better, leaf mostly 5 and better, staple 35 and longer, mike 35-49, strength 28-35, and uniformity 79-84 traded at around 225 points on March ICE futures, FOB car/truck (Rule 5, compression charges paid).

South Delta

  • A light volume of color 51 and better, leaf mostly 5 and better, staple 35 and longer, mike 35-49, strength 28-35, and uniformity 79-84 traded at around 225 points on March ICE futures, FOB car/truck (Rule 5, compression charges paid).

Southwestern Markets Regional Summary

East Texas

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

The Corpus Christi Classing Office has provided classification services on more than 2.2 million samples for producers in the Rio Grande Valley, south Texas, and in the Blackland Prairies. About 10 gins continued pressing services in the northern Blackland Prairies, the Winter Garden area, and in south Texas. Producers in south Texas were busy preparing the soil and controlling weeds ahead of the planting season. Fertilizers were applied.

In Kansas, harvesting neared 80 percent completed. Ginning is expected to continue into March. In Oklahoma, harvesting was 90 percent completed, according to local sources. A lack of available harvesters to service the exceptionally large crop was cited as the reason that not all fields had been picked. Modules were transported to the gin yards.

West Texas

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

Temperatures varied from the mid-40s to the low 80s across the region as dry conditions prevailed. According to the local newscast on January 10, Lubbock had not received significant rainfall in 63 days. A cold front brought less than two-tenths of an inch of wintry precipitation late in the period to a localized area around the New Mexico border.

Winds were gusting more than 50 miles per hour and wind turbines were shut down. Fieldwork was interrupted. Harvesting was mostly completed, but some fields remained unpicked due to harvesting equipment not being available. Modules were transported from the fields to the gin yards.

A few gins finished for the season in the High Plains. The exceptionally large crop in the panhandle challenged ginning capacity and the gins were less than 50 percent completed. The Lubbock Classing Office graded more than 2.8 million samples and the Lamesa Classing Office graded more than 1.3 million samples.

The Abilene Classing Office has graded more than half a million samples for producers in west Texas.

Trading

East Texas

  • In Texas, a moderate volume of mostly color 42 and better, leaf mostly 3-5, staple 35 and longer, mike 34-52, strength 28-35, and uniformity 79-83 sold for around 72.00 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a light volume of color 21 and 31, leaf 3 and 4, staple 36 and 37, mike averaging 37.2, strength 27-29, and uniformity 80-81 sold for around 72.00 cents same terms as above.
  • A light volume of mostly color 31, leaf 4-6, staple 36 and 37, mike 31-36, strength 27-29, and uniformity 78-80 sold for around 63.50 cents, same terms as above.
  • In Oklahoma, a moderate volume of mostly color 21 and better, leaf 3 and better, staple 37 and longer, mike 33-41, strength 27-32, and uniformity 79-83 sold for around 77.75 cents, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 21, leaf 2 and 3, staple 36 and longer, mike averaging 44.0, strength averaging 32.7, and uniformity averaging 81.6 sold for around 75.75 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for around 19.50 to 22.50 cents.

West Texas

  • A heavy volume of color 31 and better, leaf 3 and better, staple 36 and longer, mike 35-46, strength 27-33, and uniformity 78-81 sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 31 and better, leaf 3 and better, staple 37 and 38, mike 33-42, strength 27-29, and uniformity 79-80 sold for around 76.50 cents, same terms as above.
  • A moderate volume of color 21 and 31, leaf 2 and 3, staple 36, mike 31-35, strength 29-31, and uniformity 79-80 sold for around 69.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 14.25 to 17.75 cents.

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. Producers inquired for 2018-crop contracts. A light volume of new-crop contracting was reported. Average local prices were higher.

According to published sources, the 102 day dry-streak was broken on Tuesday night, January 9 when measurable rainfall was received in Phoenix, Arizona. Southwestern and central Arizona received approximately one-quarter to one-half inches of precipitation. Higher elevations received generous snowfall amounts.

A few modules remained in fields, but most were on the gin yards. Harvesting was virtually completed. Precipitation accumulations were light in New Mexico and El Paso, Texas. Ginning continued uninterrupted in the DSW. Producers considered spring planting options.

San Joaquin Valley (SJV)

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 spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate.

The high pressure system, which kept California dry for the past few weeks, lifted and rainfall was welcomed into the Valley mid-week. The Valley received around three-quarters of an inch to one and three-quarter inches of rain. Snowfall was received in elevations above 8,000 feet in the Sierra Nevada Mountains.

This is a great start to the New Year, as December was extremely dry. California receives about half of its annual precipitation during December, January, and February. Early morning fog was present late in the period. Ginning continued. Producers considered spring planting options. Fields were prepped for planting.

American Pima (AP)

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Producers inquired for 2018-crop contracts. Foreign mill inquiries were steady. Interest was best from China.

According to the Foreign Agricultural Service Export Sales report, approximately 480,800 bales of 2017-crop AP was committed for the week ending January 4, 2018. Sale commitments of 2018-crop cotton remained unchanged for several weeks at 35,400 bales compared to no bales committed at this same time last year.

Welcomed precipitation and snow was received throughout the Far West region. Rainfall amounts varied with central Arizona receiving around one-quarter to one-half inches and the San Joaquin Valley of California received three-quarters to one and three-quarter inches. Trace amounts up to one-tenth of an inch was reported in New Mexico and El Paso, Texas.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • Agents for mills in China purchased a moderate volume of color 2, leaf 2 and better, and staple 48 and longer for January/February shipment.
Ernst Undesser
From USDA January 12, 2018