Weekly Cotton Market Review – USDA

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Average quotations were 89 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 71.04 cents per pound for the week ending Thursday, December 7, 2017.

The weekly average was up from 70.15 last week and from 70.24 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 70.54 cents Tuesday, December 5 to a high of 72.20 cents Thursday, December 7. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 7 totaled 81,415 bales.

This compares to 98,660 bales reported last week and 59,630 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 516,340 bales compared to 415,661 bales the corresponding week a year ago.

The ICE March settlement prices ended the week at 74.23 cents, compared to 72.81 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.

Partly cloudy conditions prevailed across the lower Southeastern region early in the period with daytime highs in the low to mid-70s. Harvesting was delayed in some fields due to early morning fog, but outside activities advanced as dry conditions allowed. Producers attempted to complete fieldwork ahead of a cold front, which entered the region and brought wet and cold conditions later in the week.

Scattered showers brought around one-quarter to three-quarters of an inch of precipitation to areas across south Alabama, the Florida panhandle, and south Georgia. Winter weather advisories were issued throughout much of central Alabama as many areas were expected to receive a wintry mix of light snow and rain in the near term.

In the Carolinas and Virginia, harvesting and winter fieldwork advanced over the weekend as mostly cloudy conditions were observed with daytime temperatures in the low 50s to low 70s. A cold front entered the region late week and daytime temperatures dropped into the low 40s.

Fieldwork was also interrupted as much of the eastern Carolinas and Virginia received around one-quarter to one-half of an inch of moisture. Gins continued to work through backlogs of modules.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 42 and better, leaf 4, and staple 34 and longer for first through third quarter 2018 delivery. No sales were reported. Additional inquiries were light as most mills have covered their immediate-to-nearby raw cotton needs. Most mills operated five to seven days.

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Demand through export channels was moderate to good. Agents throughout the Far East inquired for any discounted styles of cotton.

Trading

  • A moderate volume of color mostly 31, leaf 2 and 3, staple 35-39, mike 37-49, strength 28-31, and uniformity 80-83 sold for around 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 31 and 41, leaf 3 and 4, staple 34-36, mike 43-49, strength 28-32, and uniformity 80-82 sold for around 375 to 400 points on ICE March futures, same terms as above.
  • A light volume of color mostly 41, leaf 2 and 3, staple 33-35, mike 43-49, strength 27-28, and uniformity 80-82 sold for around 125 points on ICE March futures, same terms as above.

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. 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, wet weather prevailed during the week. Daytime temperatures were in the 50s to 70s. Overnight lows were in the 20s and 40s as a cold front brought frigid temperatures, which were expected to linger into next week. Up to 1 inch of rainfall was reported throughout the region. Harvest was virtually completed; only a few isolated fields remained unharvested. Ginning continued at a steady pace, but numerous gins completed annual pressing operations.

A few producers reported yields of nearly 2,000 pounds per acre; some reported yields of around 1,500 pounds, while most yields varied from 900 to 1,300 pounds per acre. Ginning was winding down in the territory of the Dumas Classing Office. Most of the gins in the Memphis territory were still operating.

According to the U.S. Drought Monitor, the recent rainfall failed to replenish soil moisture levels, due to unusually warm and dry conditions. As a result, moderate drought conditions deteriorated into severe drought in most of the cotton-producing areas in Arkansas and the Bootheel of Missouri. Tennessee continued to enjoy mostly adequate topsoil moisture.

South Delta

Spot cotton trading was inactive. 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.

A storm front brought light rainfall, followed by freezing temperatures, during the week. Daytime temperatures in the 70s early week plummeted into the 40s late week. Overnight lows were in the 20s to 40s. Harvesting activities were nearly completed for the season; a few isolated fields remained unharvested in Mississippi. Producers reported yields up to 1,300 pounds per acre.

Most gins had completed annual pressing operations for the season in Louisiana; only two or three were anticipating operating until after the Christmas holiday. According to the U.S. Drought Monitor, the rainfall received last week failed to replenish soil moisture levels, because of unseasonably warm temperatures and dry weather. As a result, areas of moderate to severe drought expanded in most of the cotton-producing areas in Louisiana and Mississippi.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • No trading activity was reported.

Southwestern Markets Regional Summary

East Texas

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

Fields were plowed in the Upper Coastal counties to aerate the soil and control weeds. Soggy modules, a result from earlier rainfall during Hurricane Harvey, caused ginning to advance at a slower pace, according to local reports. Widespread rainfall began mid-week and continued through the end of the reporting period.

A cold front on December 7, brought an extensive snow storm that deposited varied amounts in south Texas, the Rio Grande Valley, and in the southern and northern Blackland Prairies. Wintery precipitation was beneficial ahead of spring planting. In the Blackland Prairies, ginning made good progress and was expected to finish by the end of December. Producers finalized winter wheat planting, applied fertilizer, and tilled fields for weed control.

Harvesting and ginning advanced under clear, open, and mostly sunny conditions in Kansas with daytime highs in the upper 30s to low 50s, and nighttime lows in the low 20s to low 30s. Harvesting neared completion in Oklahoma under cold, sunny conditions.

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 inactive. Foreign inquiries were light-to-moderate. Interest was best from China, Pakistan, and Taiwan.

An Arctic blast brought cold, windy conditions with temperature highs in the upper 30s to upper 70s and nighttime lows in the low 20s to low 30s. Some areas, mostly south of Lubbock, received a light amount of wintry precipitation that caused harvesting delays. Some counties were more than 75 percent harvested. Counties off of the Caprock were closer to 60 percent harvested, according to local reports.

Most of the cotton will be off the stalk by Christmas. Good harvesting weather is in the nearby forecast. Some producers completed harvesting and conducted post-harvest equipment maintenance on pickers and strippers. Ginning continued uninterrupted. Approximately half of the gins were running night shifts. Producers inquired about the Module Averaging Program to help increase marketability of their cotton.

Trading

East Texas

  • In Texas, a mixed lot containing a moderate volume of mostly color 42 and better, leaf 4 and better, staple 34-38, mike 37-49, strength 28-32, uniformity 80-83, and 50 percent extraneous matter sold for around 67.25 cents per pound, FOB warehouse (compression charges not paid).
  • Mixed lots containing a heavy volume of mostly color 52 and better, leaf 4 and better, staple 34-37, mike 40-54, strength 25-31, and uniformity 79-83 sold for 65.50 to 66.50 cents same terms as above.
  • A mixed lot containing a light volume of mostly color 53 and better, leaf 5 and better, staple 34 and longer, mike 35-51, strength 26-31, uniformity 78-82, and 75 percent extraneous matter sold for around 59.00 cents, same terms as above.
  • In Oklahoma, a moderate volume of mostly color 21 and 31, leaf 3, staple 37 and longer, mike 40-46, strength 31-33, and uniformity 81-82 sold for around 74.00 cents, FOB car/truck (compression charges not paid).
  • A moderate volume of color 31 and better, leaf 4 and better, staple 35 and longer, mike averaging 37.6, strength averaging 29.2, uniformity averaging 81.1, and 50 percent extraneous matter sold for around 72.00 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 17.50 to 17.75 cents.

West Texas

  • A heavy volume of mixed lots mostly color 11 and 21, leaf 3 and better, staple 36 and longer, mike 30-53, strength 27-33, and uniformity 78-83 sold for 74.00 to 75.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of mostly color 22 and better, leaf 3 and better, staple 36 and longer, mike 36-40, strength 31-33, uniformity 80-84, and 25 percent extraneous matter sold for around 71.75 cents, same terms as above.
  • A heavy volume of mostly color 31 and better, leaf 4 and better, staple 35 and longer, mike 30-42, strength 25-30, and uniformity 77-82 sold for around 68.25 cents, same terms as above.

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 co-op, 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. Interest was best from Bangladesh, Pakistan, and Vietnam.

A cold front pushed through Arizona, with scattered showers. Harvesting and ginning continued. Arizona producers delivered an outstanding quality crop. The Visalia Classing Office reported the season average of color 31 and better, leaf 3 and better at 95 percent, mike averaging 45.2, length averaging 36.83, and strength averaging 31.38 for week ending December 7.

A cold front brought freezing temperatures with a quarter of an inch of rainfall to New Mexico and El Paso, Texas late in the period. A chance of snow was forecasted. Harvesting was slowed due to wet weather and icy conditions. Ginning continued uninterrupted.

Plenty of irrigation water was available for next growing season, as the El Paso County Water Improvement District 1 provided producers with 3 acre feet of water.

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. Interest was best from China, India, Vietnam, and Taiwan. Shipper’s prices were firm.

A hard freeze warning was in effect for the SJV mid-week. Traces of moisture were received; however, the region remains dry. Saw and roller ginning continued. Stalk destruction was ongoing. The California Department of Water Resources announced that state project water contractors can expect to get 15 percent of their requested deliveries.

This initial allocation will be adjusted as more storms arrive from December through April. The Visalia Classing Office reported the season average Upland saw-ginned length at 37.32 for week ending December 7 compared to 36.82 at this same time last year. Strength averaged 34.07 compared to 33.83 last year.

The season average Upland roller-ginned length was 38.90 the same as in 2016. Strength averaged 36.15 compared to 36.18 last year.

American Pima (AP)

Spot cotton trading was slow. Supplies and demand were moderate. Average local spot prices were higher. No forward contracting was reported. Domestic mill inquiries were active. Foreign mill inquiries were moderate. Interest was best from China, India, and Peru. Concern remains on how many bales will be produced in the San Joaquin Valley. Yields were significantly lower than expected.

A cold front brought Arctic air into the Far West. Freezing early morning temperatures were reported throughout the region. Freeze warnings were in effect and scattered showers were reported in Arizona, New Mexico, and El Paso, Texas. Icy conditions were reported in El Paso, Texas. Harvesting and ginning continued. The Visalia Classing Office reported the season average AP length at 49.21 for week ending December 7 compared to 48.76 at this same time last year. Strength averaged 43.66 compared to 43.46 the previous season.

Trading

Desert Southwest

  • In Arizona, a moderate volume of mostly color 11, leaf 1 and 2, staple 36 and longer, mike averaging 48.0, strength averaging 32.5, and uniformity averaging 80.8 sold for around 74.00 cents per pound, uncompressed FOB warehouse.
  • A light volume of color l1, leaf mostly 2, staple 37 and longer, mike averaging 35.0, strength averaging 32.0, and uniformity averaging 80.3 sold for around 70.25 cents, same terms as above.
  • In New Mexico, a light volume of mostly color 32 and better, leaf 3 and better, staple 37, mike averaging 39.0, strength averaging 30.3, and uniformity averaging 80.3 sold for around 71.25 cents per pound, FOB car/truck (compression charges not paid).

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A moderate volume of color 2, leaf 2 and better, and staple 48 and longer was sold for around 150.00 cents per pound, UD free FOB warehouse.

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