Weekly Cotton Market Review – USDA

Average quotations were 156 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 68.99 cents per pound for the week ended Thursday, December 22, 2016.

The weekly average was down from 70.55 cents last week, but up from 62.01 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 69.99 cents Friday, December 16 to a low of 68.35 cents Tuesday, December 20.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 22 totaled 40,678 bales. This compares to 79,957 bales reported last week and 74,618 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 536,296 bales compared to 660,324 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 70.20 cents, compared to 71.67 cents last week.

Holiday Publication Schedule

Weekly Cotton Market Review

No report will be published on December 30, 2016. Regular scheduled publication will resume on January 6, 2017. Prices are in effect from December 23 – 29, 2016

  • Adjusted World Price (AWP) – 60.04
  • ELS Competitiveness Payment – 0.00
  • Loan Deficiency Payment (LDP) – 0.00
  • Fine Count Adjustment 2015 Crop – 0.32
  • Coarse Count Adjustment (CCA) – 0.00
  • Fine Count Adjustment 2016 Crop – 0.42
    Source: Farm Service Agency, FSA, USDA

Regional Summaries

Southeastern Market

Spot cotton trading was moderate. Supplies of available cotton were moderate. Demand was good. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Mostly cloudy and damp conditions prevailed across the entire Southeast during the period with variable daytime highs in the 30s to mid-70s. Widespread shower activity brought light scattered rainfall to most areas across the region early in the period. Day-to-day accumulated precipitation totals measured from one-quarter of an inch to around one and one-quarter inches in areas from the Gulf to Atlantic Coasts.

Harvesting neared completion and producers completed fieldwork in areas were soils were firm enough to support equipment. Pressing operations continued uninterrupted in Alabama and Georgia as gins processed backlogs of modules; several gins had finished operations for the season.

In the Carolinas and Virginia, harvesting was mostly completed, but wet conditions delayed harvesting and fieldwork in the few remaining fields to be picked. Ginning was mostly completed, but a few gins had gone to gin days or continued daily pressing operations.

Reflecting on the 2016 growing season, producers and industry experts reported that droughty conditions during the fall negatively impacted the yields in the lower Southeast while damaging winds and rain from Tropical Storm Julia and Hurricane Matthew reduced qualities and yields in the upper Southeast.

South Central Markets

North 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.

A warm air flow early in the period brought scattered rain showers; however, less than one inch of precipitation was reported. A cold front mid-week brought frigid overnight temperatures that plummeted into the teens to 20s; high temperatures were in the 40s and 50s. According to the U.S. Drought Monitor, the drought condition for most of the region improved to mostly moderate. Ginning in the region was rapidly drawing to a close as the few gins still operating were working on gin days. No fieldwork was reported.

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.

A warm front early in the period brought cloudy skies, but the region only received trace amounts of precipitation. A cold front mid-week brought cold overnight temperatures that dropped into the 20s before moderating late week; high temperatures were in the 40s and 60s. According to the U.S. Drought Monitor, the drought condition improved to moderate; however, rainfall deficits of 10 to 20 inches remained for parts of the region. A few gins in Mississippi were operating on gin days. No fieldwork was reported.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was active. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Foreign mill inquiries were heavy. Interest was best from India, Pakistan, and Vietnam.

Producers in the Rio Grande Valley tilled soils and built rows for sorghum and cotton planting. Sorghum is planted the last week of January and cotton is generally planted in March. Cottonseed was booked. Conditions remained dry. In eastern Texas, some gins completed the season while others continued processing the remaining modules.

Below average temperatures were recorded and some rainfall was received that interfered with harvesting remaining fields. Harvesting and ginning was near completion. Snowfall delayed harvesting, which was estimated at 85 percent completed in Kansas and 90 percent in Oklahoma, according to industry experts.

Most gins were busy processing the abundant backlog of modules sitting on the gin yards. Booking seed for next year was active. Local reports indicated an expected increase of 25 to 30 percent of planted acres for next season.

West Texas

Spot cotton trading was active. 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 heavy. Interest was best from India, Pakistan, and Vietnam.

Gusty winds up to 50 miles per hour hampered harvesting and ginning activities early in the reporting period. Wintry precipitation was received in some areas, but was not significant. Daytime temperatures were volatile from record highs in the upper 70s to record lows in the single digits. Wind chill factors were around zero. Near normal temperatures returned mid-week in the upper 60s to low 70s and fieldwork became active again.

Harvesting neared completion. Ginning was scaled back during periods of high winds because of the increased potential for fire hazards, but overall ginning made good progress. Modules were transported from fields to gin yards for processing and pressing. Stalks were shredded and incorporated into the soil. Producers booked seed for next season.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies were moderate. Demand was light. Producers delivered previously contracted cotton. Average local prices were lower. Merchants were busy preparing paperwork for producer deferred payments into the New Year. No forward contracting or domestic mill activity was reported.

Partly cloudy to sunny conditions were reported in Arizona. Showers moved in from the south late in the period. Approximately one-quarter of an inch of rainfall was received. Ginning continued. Most gins will be closed over the Christmas weekend. Temperatures varied in New Mexico and El Paso, Texas. Scattered showers and drizzle began late in the period. About one-third of an inch of moisture was received. Ginning continued. A couple of New Mexico gins completed pressing operations for the season.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Producers delivered previously contracted cotton. Average local prices were lower. Merchants were busy preparing paperwork for producer deferred payments into the New Year. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

A hard freeze warning was in effect for the Valley mid-week. Early morning fog was prevalent late in the period. Heavy rain was in the near-term forecast, which will be beneficial to reservoirs. Ginning continued. Most gins will be closed over the Christmas weekend.

American Pima (AP)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Producers delivered a moderate volume of previously contracted cotton. Average local prices were steady. Merchants were busy preparing paperwork for producer deferred payments into the New Year. No forward contracting was reported.

Scattered showers deposited one-quarter of an inch to one-third of an inch of rainfall in Arizona, New Mexico, and El Paso, Texas late in the period. Ginning continued as gins had a backlog of modules to work through. Most gins will be closed over the Christmas weekend, with a couple of gins that will also be closed on December 26, 2016.

Regional Price Information

Southeastern Markets

  • A moderate volume of color 21 and 31, leaf 2 and 3, staple mostly 38, mike 37-42, strength 29-32, and uniformity 81-83 sold for around 450 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color 21, 31, and 41, leaf mostly 2 and 3, staple 33-38, mike 37-47, strength 29-32, and uniformity 80-83 sold for around 375 points on ICE March futures, same terms as above.
  • A moderate volume of color 31 and 41, leaf 2-4, staple 34 and longer, mike 43-52, strength 29-32, and uniformity 80-83 sold for around 69.75 cents per pound, same terms as above.
  • Even-running lots containing color 31, leaf 2 and 3, staple 36-38, mike 43-49, strength 30-32, and uniformity 80-83 sold for around 72.75 cents, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color mostly 31, leaf 2-4, staple 34, mike 35-49, strength 27-30, and uniformity 79-81 sold for around 69.50 cents, 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 Kansas and Oklahoma, a light volume of color 41 and better, leaf 5, staple 36 and longer, mike 33-49, strength 27-32, uniformity 77-82, and 50 percent extraneous matter sold for around 66.25 cents per pound, FOB car/truck (compression charges not paid).
  • In Texas, a light volume of mostly color 33 and 43, leaf 4 and better, staple 36 and longer, mike 40-52, strength 27-32, uniformity 77-83, and 25 percent extraneous matter sold for around 61.50 cents, FOB warehouse (compression charges not paid).
  • A moderate volume of mostly color 52 and 62, leaf 3-5, staple 33 and longer, mike 45-50, strength 27-30, uniformity 77-80, and 25 percent extraneous matter sold for around 59.25 cents, same terms as above.

West Texas

  • A light volume of color 21 and 31, leaf 3 and better, staple 35 and longer, mike 37-51, strength 27-29, and uniformity 79-81 sold for around 69.00 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of mostly color 31, leaf 2 and 3, staple 35, mike 35-47, strength 26-29, and uniformity 78-80 sold for around 66.50 cents, same terms as above.
  • Mixed lots containing a moderate volume of color 33 and better, leaf 5 and better, staple 36 and longer, mike 29-49, strength 26-33, uniformity 77-83, and 50 percent extraneous matter sold for around 63.50 cents, same terms as above.
  • A light volume of color 31, leaf 3-5, staple 37 and longer, mike 22-30, strength 29-32, and uniformity 77-82 sold for around 58.00 cents, same terms as above.

Western Markets

Desert Southwest

A heavy volume of mostly color 31 and better, leaf 2 and better, staple 36 and longer, mike 35-49, strength averaging 31.7, and uniformity averaging 81.5 traded for around 130 points on ICE March futures, uncompressed, FOB warehouse.

A moderate volume of color 21 and better, leaf 2 and better, mostly staple 38 and longer, mike 35-48, strength averaging 31.0, and uniformity averaging 80.5 traded for around 100 to 125 points on ICE March futures, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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