Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Images

Average quotations were slightly 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 75.96 cents per pound for the week ending Thursday, January 4, 2018.

The weekly average was up from 75.89 last week and from 71.31 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 75.21 cents Tuesday, January 2 to a seasonal high of 76.71 cents Thursday, January 4.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 4 totaled 75,044 bales. This compares to 85,208 bales reported last week and 212,713 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 918,451 bales compared to 784,010 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 79.25 cents, compared to 78.80 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 for the week ending December 28, 2017, but steady for the week ending January 4, 2018. 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.

Unseasonably warm daytime temperatures in the mid-70s to 60s dropped into the 30s and 40s during the latter part of the extended two-week reporting period as Winter Storm Grayson brought snow and ice to areas from the Gulf to Atlantic coasts. Portions of the Florida panhandle recorded the first measurable snowfall in 28 years.

Areas along the eastern seaboard from northern Florida to Virginia experienced snow, sleet, and freezing rain. Much of the eastern Carolinas received one to five inches of snowfall, with heavier accumulations observed in Virginia. Power outages left tens of thousands without power throughout the region and black ice conditions on roadways delayed travel.

Clear and sunny weather prevailed late week, but icy conditions remained due to very cold temperatures with daytime highs in the 30s. The Florence Classing Office was closed late week and sample deliveries to the Macon Classing Office were delayed in some affected areas. Ginning continued as conditions allowed.

Other outside activities and fieldwork were at a standstill. Producers considered spring planting options and made plans to attend approaching annual meetings.

Textile Mill

Domestic mill buyers inquired for a heavy volume of 2017 and 2018-crop cotton, color 41, leaf 4, and staple 34 and longer for delivery June through December. Mill buyers also inquired for a moderate volume of color 51 and better, leaf 5 and better, and staple 34 and longer for April delivery. No sales were reported. Most mills resumed normal operating schedules following the holidays.

Demand through export channels was moderate. Agents throughout out the Far East inquired for any discounted styles of low mike cotton.

Trading

  • A moderate volume of color 21, 31 and 41, leaf mostly 2 and 3, staple 36 and 37, mike 43-49, strength 29-32, and uniformity 81-83 sold for around 475 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 2 and 3, staple 35-39, mike 37-42, strength 28-31, and uniformity 81-83 sold for around 350 to 375 points on ICE March futures, same terms as above.
  • A moderate volume of color mostly 41 and better, leaf 5 and better, staple 33 and longer, mike 33-50, strength 25-35, and uniformity 79-85 traded at around 81.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A heavy volume of color 31 and 41, leaf 3-5, staple 34-38, mike 37-49, strength 30-32, and uniformity 80-82 sold for around 81.00 cents, same terms as above.
  • A light volume of color 42 and better, leaf 5 and better, staple 34 and longer, mike 37-53, strength 26-33, and uniformity 79-83 traded
    at around 79.00 cents, same terms as above.

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were higher for the week ending December 28, 2017, but steady for the week ending January 4, 2018. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

More on Cotton


Seasonably cold weather prevailed during the two-week report period, interspersed with a few days of frigid temperatures. Daytime temperatures were in the 20s and 30s; early morning temperatures were in the single digits to sub-zero conditions due to the wind chill factor. Overnight lows were in the low teens and single digits. No precipitation was reported.

Ginning was winding down throughout the region. The Dumas Classing Office had a single shift operating as necessary, while the Memphis Classing Office was also down to a single shift. A few gins in the Memphis territory may operate well into January. Producers made plans to attend regional and national industry meetings, including the Beltwide meetings in San Antonio, Texas.

According to the U.S. Drought Monitor, moderate-to-severe drought expanded in Arkansas and the Bootheel of Missouri; soil moisture conditions were adequate in Tennessee.

South Delta

Spot cotton trading was slow. Supplies of available cotton were light. Demand was light. Average local spot prices were higher for the week ending December 28, 2017, but steady for the week ending January 4, 2018. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

Seasonably cold weather prevailed during the two-week report period, interspersed with several days of bitterly cold temperatures. Daytime temperatures were in the 30s; early morning temperatures were in the single digits due to the wind chill factor. Overnight lows were in the teens. No precipitation was reported. A few larger gins were still pressing cotton throughout Mississippi.

Outdoor activities were very limited due to freezing 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 expanded in northeastern Louisiana and most of 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 moderate during the two week report period. Supplies and producers offerings were moderate. Demand was moderate. Average local spot prices were higher for the week ending December 28, 2017, but steady for the week ending January 5, 2017. Trading of CCC-loan equities was active during the reporting period. Foreign mill inquiries were light.

A cold front brought cooler temperatures to the entire region towards the end of an extended two-week reporting period. Daytime temperatures were observed in the upper 60s to low 70s early in the period, but colder temperatures moved in as arctic air pushed through on December 28, with a daytime high of only 48 degrees.

Light rainfall was received, but with no significant accumulation. In the Blackland Prairies harvesting is virtually completed and ginning activity is coming to a close at most gins. In upper east Texas and the Winter Garden area, there are still a couple of gins that have two to three more weeks before they wrap-up for the season. Winter field preparations continued.

In Kansas, harvesting was around 70 to 80 percent completed. Cold weather interrupted harvesting and slowed ginning progress. No moisture was recorded during the period, which is good for harvesting, but not beneficial for the upcoming crop.

In Oklahoma, harvesting was around 80 percent completed to finish in some areas. Ginning continued at a strong pace and is expected to continue well into March or April.

West Texas

Spot cotton trading was active for the week ending December 28, 2017, but moderate for the week ending January 4, 2018. Supplies and producers offerings were heavy. Demand was very good the week ending December 28, 2017, and good the week ending January 4, 2018.

Average local spot prices were higher for the week ending December 28, 2017, but steady for the week ending January 4, 2018. Trading of CCC-loan equities was inactive for the week ending December 28, 2017, but active for the week ending January 4, 2018. Foreign inquiries were light.

A winter weather pattern characterized climatic conditions during the two-week reporting period. Daytime temperatures varied from the low 20s to the mid-50s. Overnight lows were mostly in the low teens to the upper 20s, with a few nights of single digit temperatures. No significant amount of precipitation was recorded during the period.

During the reporting period ending December 28, 2017, gins closed one or two days in observance of the Christmas holiday. During the report period ending January 4, 2018, harvesting continued, along with field preparations for next season. Ginning progress was hindered by the cold weather; slowing classing operations at the Lubbock Classing Office.

Trading

East Texas

  • For the week ending December 28, in Oklahoma, a moderate volume of color 31 and 21, leaf 2 and 3, staple 36 and longer, mike 39-44, strength 29-30, and uniformity 79-81 sold for around 78.50 cents per pound, FOB car/truck (compression charges not paid).
  • In Texas, a mixed lot containing mostly color 42 and 52, leaf 4 and better, staple 35 and longer, mike 46-51, strength 25-30, and uniformity 78-82 sold for around 70.00 cents, FOB warehouse (compression charges not paid).
  • A heavy volume of CCC-loan equities traded for around 17.50 to 19.00 cents.
  • For the week ending January 4, in Oklahoma, a moderate volume of color 21, leaf 1 and 2, staple 34 and longer, mike 39-41, strength 27-29, and uniformity 78-81 sold for around 74.50 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of CCC-loan equities traded for around 17.00 to 19.50 cents.

West Texas

  • For the week ending December 28, a mixed lot containing a heavy volume of mostly color 31 and better, leaf 3 and better, staple 36 and 37, mike 33-34, strength 27-31, and uniformity 77-82 sold for around 68.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 31 and better, leaf 4 and better, staple 35 and longer, mike 31-35, strength 28-32, and uniformity 78-81 sold for around 65.50 cents, same terms as above.
  • A light volume of mostly color 21, leaf 3 and better, staple 33 and longer, mike 29-33, strength 26-31, uniformity 76-80, and 25 percent extraneous matter sold for around 62.25 cents, same terms as above.
  • For the week ending January 4, a mixed lot containing a moderate volume of color 31 and better, mostly leaf 2 and 3, staple 34 and longer, mike 36-39, strength 26-29, and uniformity 76-80 sold for around 75.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing mostly color 31 and better, leaf 3-5, staple 35 and longer, mike 26-33, strength 29-32, uniformity 77-82, 75 percent extraneous matter sold for around 61.00 cents, same terms as above.
  • A moderate volume of color 22, leaf 3 and 4, staple 33 and longer, mike 25-32, strength 26-30, uniformity 76-80, 50 percent extraneous matter sold for around 56.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 14.50 to 19.50 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 co-op, merchant marketing pools, or into the CCC-loan program. Average local spot prices were higher for the week ending December 28, 2017, but steady for the week ending January 4, 2018.

Clear to partly cloudy conditions prevailed across the region during the two-week reporting period with variable daytime temperatures in the upper 50s to mid-70s. Gins continued to process backlogs of modules.

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 for the week ending December 28, 2017, but steady for the week ending January 4, 2018. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate.

Saw and roller-gins continued pressing operations. Partly cloudy weather with intermittent hazy conditions characterized the two-week reporting period. Daytime high temperatures were observed in the mid-60s to lower 70s. The first snow survey was conducted by the California Department of Water Resources (DWR) on January 3.

The snow-water content survey indicated that the water content of the northern Sierra Nevada was around 21 percent of average levels, 29 in the central, and 20 percent in the southern Sierra. Statewide, the DWR estimates the snowpack holds 2.6 inches of snow water equivalent, or 24 percent of the January 3 average.

American Pima (AP)

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was 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.

Agents for mills in Pakistan purchased a light volume of color 2, leaf 2 and better, and staple 48 and longer for prompt shipment. Local experts were concerned that a smaller crop may be produced in the San Joaquin Valley, due to lower than expected yields.

Mostly fair conditions prevailed in the Desert Southwest and San Joaquin Valley. Unseasonably warm daytime highs reached into the 70s during the latter part of the extended two-week reporting period. Ginning resumed in the Far West following the holidays.

Trading

Desert Southwest

  • A moderate volume of color 21 and better, leaf 2 and better, and staple 38 and longer traded for around 77.00 cents per pound, uncompressed, FOB warehouse.
  • In New Mexico, a moderate volume of color mostly 31, leaf 2 and 3, staple 35 and 36, mike 35-49, strength 28-30, and uniformity 79-81 sold for around 74.00 cents, FOB car/truck (compression charges not paid).

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A heavy volume of mostly color 1, leaf 2 and better, and staple 48 and 50 traded for around 150.50 cents per pound, UD free, FOB gin yard.

Weather

Markets

The Latest