Weekly Cotton Market Review – USDA

Spot cotton quotations were 101 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 62.01 cents per pound for the week ended Thursday, December 17, 2015.

The weekly average was down from 63.02 cents last week, but higher than the 59.44 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 62.29 cents Friday, December 11 to a low of 61.78 cents Thursday, December 17.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 17 totaled 54,208 bales. This compares to 138,555 bales reported last week and 153,598 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 585,706, bales compared to 794,836 bales the corresponding week a year ago.

The ICE March settlement prices ended the week at 62.99 cents, compared to 63.77 cents last week.

Prices are in effect from December 18-24, 2015

  • Adjustment World Price (AWP) – 47.86
  • Loan Deficiency Payment (LDP) – 4.14
  • Coarse Count Adjustment (CCA) – 0.00
  • ELS Competitiveness Payment – 0.00
  • Fine Count Adjustment 2014 Crop – 1.11
  • Fine Count Adjustment 2015 Crop – 1.06
    Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #19 FOR UPLAND COTTON December 17, 2015

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 December 24, 2015, allowing importation of 15,287,174 kilograms (70,213 bales) of upland cotton.

Quota number 19 will be established as of December 24, 2015, and will apply to upland cotton purchased not later than March 22, 2016, and entered into the U.S. not later than June 20, 2016.

The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2015 through June 2015, 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.

Holiday Publication Schedule

Weekly Cotton Market Review

  • The report for the week of December 18-24 will be published on December 28.
  • No report will be published for the week of December 25-31.
  • Regular scheduled publication will resume on January 8, 2016.

Weekly Quality reports

  • The reports for the week of December 18-24 will be published on December 28.
  • The reports for the week of December 25-31 will be published on January 4.
  • Regular scheduled publication will resume on January 8, 2016.

Regional Summaries

Southeastern Markets

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

Sunny to partly cloudy conditions prevailed throughout the Southeast over the weekend, with unseasonably warm temperatures observed in the low to upper 70s early in the period. The ideal weather allowed harvesting activities to advance uninterrupted and near completion in most areas across the region. Despite the dry and sunny weather, reports indicated that pockets of low-lying fields remained soggy and inaccessible in areas from the Florida panhandle to the Carolinas.

In the lower Southeast, producers rushed to complete fieldwork ahead of a cold front which brought moderate-to-heavy shower activity late in the period. Module haulers were busy delivering modules to gin yards. Gins maintained full operating schedules; a few smaller gins had completed operations for the season while some larger gins were pushing to finish pressing operations ahead of the holidays.

In the Carolinas and Virginia, producers were also attempting to complete fieldwork ahead of the approaching storm system which arrived late in the period and brought scattered rainfall. In the Carolinas, producers navigated fields dry enough to support equipment and harvesting neared completion.

In Virginia, harvest activities were winding down. Ginning activity continued uninterrupted and several gins had completed operations for the season. Producers were busy shredding stalks, winterizing farm equipment, and making plans to attend local and regional meetings.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies were moderate. Producer offerings were light.Demand was good for color 31 and better. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Unseasonably warm conditions early in the period gave way to cooler weather. Daytime temperatures were in the mid-60s to low 70s and overnight temperatures were in the mid-to-low 30s to 40s. Light rain showers brought up to 1 inch of rain to some areas. Ginning was drawing to a close as several smaller gins ceased pressing operations for the season.

Producers worked to complete stalk shredding and fall tillage operations. According to the U.S. Drought Monitor, soil moisture throughout the region was rated at adequate-to-surplus. The rain helped to restore water levels in lakes and reservoirs; more rain is needed to replenish surface water levels and subsoil moisture.

Producers made plans to attend local, regional, and national industry events.

South Delta

Spot cotton trading was inactive. Supplies were moderate. Producer offerings were light. Demand was good for color 31 and better. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Dry, warm conditions early in the period moderated as a cold front brought cooler temperatures and some precipitation to the region. Localized storms brought up to 2 inches of rain with lesser amounts reported in several areas. Daytime temperatures were in the low 60s to upper 70s and overnight temperatures were in the mid-30s to low 50s. Stalks were shredded on a few fields ahead of the rain in order to prevent the overwintering of insect pests.

According to the U.S. Drought Monitor, topsoil moisture throughout the region was rated at adequate-to-surplus. Wet weather is in the forecast for the upcoming period, which should help to replenish depleted ponds, reservoirs, and groundwater supplies. Producers made plans to attend regional and national industry events.

Southwestern Markets

East Texas-Oklahoma

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

In South Texas and in the Rio Grande Valley, rainfall brought beneficial moisture to the region. Ginning was completed. The Corpus Christi Classing Office continued to receive sample receipts from eastern Texas. In Kansas, 8 to 10 inches of blowing snow was received which made some roadways impassable and stalled module transportation.

Local reports indicated that outside activities were delayed until fields firmed enough to support equipment. In Oklahoma, winter weather restricted field activities. Sunny, dry conditions prevailed late in the period and helped harden soils.

West Texas

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

Cold, wet conditions hindered outside activities early in the period. Most areas in the panhandle received snow. Module hauling was limited mostly to short periods, during early morning hours when the ground was frozen solid. Limited module transportation caused gins to catch up to the backlog of modules. Warmer, dryer weather returned to the region and field activities continued intermittently.

Harvesting gained momentum and neared completion in most areas. Fields located off the Caprock were estimated at 20 to 40 percent harvested. Producers cut and shredded stalks. Regional industry meetings were attended.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies were moderate. Demand was light. Average local spot prices were lower. Merchants were busy preparing paperwork for producer deferred payments. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Cold Arctic air dropped daytime temperatures into the mid-50s in Arizona. Nighttime lows were in the low 30s. Ginning was about 60 percent completed. Producers prepared fields for the winter. Warehouses were busy shipping and receiving cotton. Daytime temperatures were in the mid-70s early in the period for New Mexico and El Paso, Texas. Temperatures dropped into the high 40s late in the period. Approximately one-tenth of an inch of rainfall was recorded early in the period.

Ginning continued. The Visalia Classing Office returned to operating one 8-hour shift on December 15.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were lower. Merchants were busy preparing paperwork for producer deferred payments. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

A cold storm, originating from the Gulf of Alaska, moved into the area and dropped daytime temperatures into the low 50s to high 40s. Overnight lows were in the low 30s. The SJV received one-quarter to one-half of an inch of rainfall early in the period. Saw and roller ginning continued. Producers prepared fields for the winter. Warehouses were busy shipping and receiving cotton.

The latest seasonal rainfall total for Fresno was 2.63 inches since October 1. Snowfall levels were 2 to 5 feet in the Sierra Nevada Mountain range, with more rain and snow in the immediate forecast. Snowfall was welcomed as this area remains dry. The Visalia Classing Office returned to operating one 8-hour shift on December 15.

American Pima (AP)

Spot cotton trading was inactive. Supplies were moderate. A moderate volume of 2015-crop cotton remained in producer hands. Demand was light. Average local spot prices were steady. Merchants were busy preparing paperwork for producer deferred payments. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

A cold front, originating from the Gulf of Alaska, moved into the region and dropped daytime temperatures into the low 50s to high 40s. Approximately one-tenth to one-half of an inch of rainfall was received in the San Joaquin Valley, New Mexico, and El Paso, Texas early in the period. Ginning continued uninterrupted. The Visalia Classing Office returned to operating one 8-hour shift on December 15.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 41, leaf 4, and staple 34 and 35 for January and February 2016 delivery. Mill buyers also purchased a moderate volume of color 53 and better, leaf 5 and better, and staple 32 and longer for June through December 2016 delivery. No additional sales were reported. Most mills had covered their immediate-to-nearby raw cotton needs.

The undertone from mill buyers was cautious entering the New Year. Some mill buyers were taking a conservative approach to purchasing raw cotton due to tapering finished product demand at some locations; other mill buyers planned to make fill-in purchases as needed as business orders improve. Demand for open-end and ring-spun yarn was moderate; denim demand was good. Most mills planned around seven to ten days of downtime for the Christmas and New Year’s holidays for routine maintenance.

Inquiries through export channels were moderate. Agents for mills in Vietnam inquired for a moderate volume of color 31 and 41, leaf 3 and 4, and staple 34-36 for January through March 2016 shipment. No sales were reported.

Regional Price Information

Southeastern Markets

  • Even-running lots containing color 31, leaf 2 and 3, staple 36 and 37, mike 43-50, strength 28-30, and uniformity 80-83 sold for around 68.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A moderate volume of color 52-63, leaf 4-6, staple 33-35, mike mostly 48-52, strength 24-28, and uniformity 78-81 sold for 54.25 to 55.25 cents, same terms as above.
  • A moderate volume of color mostly 31 and 41, leaf 2 and 3, staple 34-37, mike 43-52, strength 26-30, and uniformity 80-82 sold for 525 to 575 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color mostly 41, leaf 3 and 4, staple 34-37, mike 35-49, strength 27-30, and uniformity 79-81 sold for around 425 to 450 points on ICE March futures, same terms as above.
  • Mixed lots containing color 41 and 42, leaf 3 and 4, staple 34-38, mike 43-52, strength 28-31, and uniformity 80-82 sold for 150 to 200 points on ICE March futures, same terms as above.
  • Mixed lots containing color mostly 42 and 52, leaf 3 and 4, staple 36-38, mike 37-47,strength 28-31, and uniformity 80-83 sold for around 100 points on ICE March futures, 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 Texas, a heavy volume of color 31 and 41, leaf 5 and better, staple 37 and longer, mike 35-45, strength 27-35, and uniformity 79-83 sold for around 59.75 cents per pound, FOB warehouse (compression charges not paid).
  • In Oklahoma, a light volume of color 21, leaf 2 and 3, staple 37, mike averaging 35.0, strength averaging 32.7, and uniformity averaging 81.9 sold for around 64.75 cents, same terms as above.
  • A light volume of color 42 and better, leaf 6 and better, staple 37 and longer, mike 38-43, strength 30-32, and uniformity 80-82 sold for around 51.00 cents, FOB car/truck (compression charges not paid).

West Texas

  • A moderate volume of color 31 and better, leaf 3, staple 36 and longer, mike 36-42, strength 29-31, and uniformity 79-81 sold for around 64.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of color 21 and 31, leaf 2 and 3, staple 35 and longer, mike 40-46, strength 29-33, and uniformity 79-81 sold for around 63.25 cents, same terms as above.
  • A heavy volume of color 31 and better, leaf 4 and 5, staple 36 and longer, mike 33-45, strength 29-35, and uniformity 78-82 sold for 55.75 to 61.00 cents, same terms as above.

Western Markets

Desert Southwest

  • A light volume of color 21 and better, leaf 2 and better, staple 35-38, mike 37-49, strength averaging 28.8, and uniformity averaging 80.4 sold for around 175 points on ICE March futures, uncompressed, FOB warehouse.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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