Weekly Cotton Market Review – USDA

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Average quotations were 220 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 79.04 cents per pound for the week ending Thursday, January 18, 2018.

The weekly average was up from 76.84 last week and from 70.92 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 78.66 cents Tuesday, January 16 to a high of 79.56 cents Thursday, January 18. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 18 totaled 95,760 bales.

This compares to 148,565 bales reported last week and 53,781 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,162,776 bales compared to 926,811 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 82.63 cents, compared to 82.65 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was inactive. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive.

Mostly clear to fair conditions prevailed across the entire Southeastern region during the period with daytime highs in the low 30s to mid-40s. A cold front entered the region mid-week, ushering in Winter Storm Inga and freezing rain and snow. Winter storm and wind chill advisories were issued across the region as locales experienced extremely hazardous driving conditions and dangerously cold wind chills.

Sleet and snowfall accumulations ranged from trace amounts to around 2 inches in areas of the lower Southeast to around 4 to 9 inches in portions of the Carolinas and Virginia. Producers welcomed the moisture, which helped alleviate abnormally dry-to-moderate drought conditions throughout areas of the region from the Gulf to Atlantic Coasts.

The Macon and Florence Classing Offices were closed due to inclement weather on Wednesday, January 17. Ginning continued throughout the region, but was winding down at many locations. Producers considered spring planting options and made plans to attend annual meetings scheduled across the region.

Textile Mill

Demand was good for 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. No additional inquiries were reported. Winter Storm Inga disrupted raw cotton deliveries and finished product shipments at some plants. Operations were also delayed at some locations, due to absent workers.

Cotton Commentary


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

Trading

  • No trading activity was reported.

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. Trading of CCC-loan equities was inactive. A light amount of forward contracting was reported. Cotton was being delivered to fulfill contracts.

Winter Storm Inga brought a wintry mix of rain, sleet, and snow showers to the region early week. Daytime temperatures plummeted into the single digits, with wind chill factors below zero. Treacherous road conditions prompted the closure of all schools, many businesses, and most government services, with the exception of first responders.

About 4 inches of snow accumulated in most areas, with 5 to 7 inches in northern areas. Ginning was slowly winding down throughout the region. The Memphis Classing Office closed for several days, due to the observance of Martin Luther King, Jr. Day and inclement weather; several thousand bales were classed during the week. Outdoor activities were at a halt due to bitter conditions. Cotton extension specialists were confident that the subzero temperatures would eliminate many overwintering insect pests.

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

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. A light amount of forward contracting was reported. Cotton was being delivered to fulfill contracts.

Winter Storm Inga brought a wintry mix of precipitation to the region early week. Daytime temperatures hovered in the teens, with wind chill factors in the single digits. Icy road conditions prompted the closure of some sections of interstate highways in Louisiana, as well as schools, retail operations, and government services.

About 2 inches of snow accumulated in most areas. Outdoor activities were idle due to cold, wet conditions. Cotton extension experts were optimistic that the freezing temperatures would destroy many overwintering insect pests. Producers attended various industry meetings.

Moderate-to-severe drought conditions improved in northeastern Louisiana and parts of Mississippi, according to the U.S. Drought Monitor.

Trading

North Delta

  • Producers booked a light volume of 2018-crop cotton at even ICE December 2018 futures with government discounts.

South Delta

  • Producers booked a light volume of 2018-crop cotton at even ICE December 2018 futures with government discounts.

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 China, Taiwan, and Turkey.

South and east Texas experienced frigid weather conditions from Winter Storm Inga that brought drizzle, sleet, and snow. Some areas of the Rio Grande Valley received a light dusting of snow on January 16. The daytime temperatures in Harlingen were variable in the mid-20s to low 60s. Pressing services were finalized in south Texas and in the Winter Garden areas. Ginning continued in the northern Blackland Prairies.

Ginning continued in Kansas, with daytime temperatures in the low 20s to low 50s and overnight lows in the single digits to low 20s. Conditions were similar in Oklahoma with reports of ginning continuing into May and possibly June, due to the size and exceptional yield of the crop. No precipitation was reported.

Producers attended the Red River Crops Conference held in Altus, Oklahoma on January 17 and 18. The event was co-hosted by the Oklahoma State University Extension and the Texas A&M Agrilife Extension. Attendees received the latest updates on markets, herbicides, weed control, Bt technology, and cover crop production.

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 active. Foreign inquiries were moderate. Interest was best from China, Taiwan, and Turkey.

Dry conditions prevailed with temperature variances in the mid-20s to the low 60s across the region. Extremely cold air moved through early in the reporting period. Some fires were reported at gins during times of high winds gusting around 50 miles per hour. Some fields have not been harvested and were under evaluation by insurance adjusters.

Ginning continued with some delays caused by high winds. More than 20 gins have finalized pressing services for the season. Some gins have worked together processing modules to help finish the season. Regional meetings and trainings were hosted. The Texas Department of Agriculture requires additional training for dicamba herbicide applicators. The Texas A&M Agrilife Extension announced a schedule of trainings offered to producers with applicator licenses.

Trading

East Texas

  • In Kansas, a light volume of color 21 and 31, leaf 2, staple 34 and 35, mike averaging 36.3, strength averaging 28.6, and uniformity averaging 79.8 sold for around 76.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a moderate volume of mostly color 31, leaf 3 and 4, staple 36 and 37, mike averaging 43.9, strength averaging 30.4, uniformity averaging 81.1, and 50 percent extraneous matter sold for around 78.00 cents, same terms as above.
  • A light volume of mostly color 21 and 31, leaf 2 and 3, staple 35 and 36, mike 33-38, strength 30-31, uniformity 78-80, and 25 percent extraneous matter sold for around 74.00 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for around 21.00 to 24.00 cents.

West Texas

  • A heavy volume of color 11 and 21, leaf 3 and better, staple 35 and 36, mike 35-37, strength 28-29, and uniformity 78-81 sold for around 78.25 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 31, leaf 2, staple 34 and 35, mike 33-38, strength 27-29, and uniformity 76-79 sold for around 72.50 cents, same terms as above.
  • A mixed lot containing a moderate volume of mostly color 32 and better, leaf 4 and 5, staple 35-37, mike 27-34, strength 27-33, uniformity 77-82, and 75 percent extraneous matter sold for around 61.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 15.50 to 17.75 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was active. Supplies and demand were moderate.Average local prices were higher. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC-loan program. Producers inquired for 2018-crop contracts. No contracts were signed.

Temperatures were mild and pleasant in the low-to-mid 70s for central Arizona. No rainfall was recorded in the period. Ginning continued uninterrupted. Arizona producers delivered an outstanding quality crop this season. The Visalia Classing Office reported the season average of color 31 and better, leaf 3 and better just over 96 percent, mike averaging 44.3, length averaging 36.96, and strength averaging 31.52 for week ending January 18.

Temperatures were in the 50s and 60s for New Mexico and El Paso, Texas for most of the week. Extreme cold and strong winds plunged temperatures into the low to mid-30s late week. Ginning continued.

The El Paso County Water Improvement District 1 plans to release irrigation water from the Caballo Dam on March 16 for April 1 delivery, with an initial water allocation of 3.5 acre feet for agricultural water users. This is just shy of a full allocation of 4.0 acre feet. Allocations could likely increase if more rain and snow comes between now and April. Producers considered spring planting options.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were higher. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC-loan program. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate.

Dense early morning fog was present for most of the period. Rain and snow are in the near term forecast. Ginning continued. The Visalia Classing Office reported the season average Upland saw-ginned length at 37.04 for week ending January 18 compared to 36.89 at this same time last year. Strength averaged 33.76 compared to 33.94 the previous season.

The season average Upland roller-ginned length was 38.92 compared to 38.98 in 2017. Strength averaged 36.04 compared to 36.30 last year. Ginning continued. Producers considered spring planting options. Fieldwork was on-going

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. Producers inquired for 2018-crop contracts. Foreign mill inquiries were light.

Temperatures were in the 70s for Arizona and 50s in California. Seasonable temperatures dropped into the low 30s for New Mexico and El Paso, Texas late week as frigid air worked its way through the region. No moisture was reported for the Far West, although rain and snow are in the near term forecast. Ginning continued uninterrupted.

The Visalia Classing Office reported the season average AP length at 49.14 for week ending January 18 compared to 48.84 at this same time last year. Strength averaged 43.64 compared to 43.63 the previous season.

Trading

Desert Southwest

  • In Arizona, a heavy volume of color 11 and 21, leaf 1 and 2, staple 37 and longer, mike averaging 48.0, strength averaging 32.5, and uniformity 80.8 sold for around 84.00 cents per pound, uncompressed FOB warehouse.
  • A moderate volume of mostly color 21 and better, leaf 2 and better, staple 37 and longer, mike 37-45, strength averaging 31.5, and uniformity averaging 81.0 sold for around 82.50 cents, same terms as above.
  • A light volume of mostly color 21 and better, leaf 3 and better, staple 35-38, mike 35-49, strength averaging 32.3, and uniformity averaging 81.5 sold for around 275 points off ICE March futures, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A light volume of mostly color 1, leaf 1, staple 48 and longer, mike averaging 37.6, strength averaging 42.5, and uniformity averaging 85.7 sold for around 142.75 cents per pound, uncompressed, FOB warehouse.
  • A light volume of mostly color 1, leaf 1, staple 48, mike averaging 35.4, strength averaging 43.2, and uniformity averaging 85.1 sold for around 140.75 cents, same terms as above.

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