Weekly Cotton Market Review – USDA

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Average quotations were 169 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 74.02 cents per pound for the week ending Thursday, February 8, 2018.

The weekly average was down from 75.71 last week, but up from 73.15 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 74.64 cents Friday, February 2 to a low of 73.58 cents Wednesday, February 7. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 8 totaled 39,562 bales. This compares to 40,895 bales reported last week and 38,852 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,340,712 bales compared to 1,240,711 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 76.62 cents, compared to 78.35 cents last week.

Southeastern Markets Regional Summary

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

Wet conditions over the weekend gave way to a window of sunny and clear weather before wet weather returned to the region late week. Widespread showers brought rainfall to areas throughout the entire Southeastern region during the period. The heaviest precipitation totals measured around 2 to 3 inches in areas from north Alabama through central Georgia to the western Carolinas.

Lesser totals of around 1 to 2 inches were observed elsewhere throughout the region. Daytime high temperatures were in the upper 50s to low 70s across the lower Southeast, with slightly cooler temperatures observed in the high 40s to mid-60s in the upper Southeast.

Ginning was winding down in the region; a few larger gins continued to process backlogs of modules and some gins remained on gin days as they waited for the remaining modules to be retrieved from fields. Fieldwork was at a standstill due to wet conditions. Producers attended regional meetings.

Textile Mill

Inquiries from domestic mills were light. No sales were reported. Most mills have covered their immediate-to-nearby raw cotton needs. Demand for open-end and ring-spun yarn was moderate and some mills reported increased finished product demand at some locations. Most mills operated five to seven days.

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

Trading

  • Mixed lots containing color mostly 31 and 41, leaf 3-5, staple mostly 36-38, mike 35-49, strength 28-30, and uniformity 80-82 sold for around 78.25 cents per pound, FOB car/truck (Rule 5, compression charges paid).

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 lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. Some warehouses reported delays due to a shortage of trucks.

Cold winter temperatures and mostly cloudy skies characterized the weather pattern during the week. Daytime temperatures were in the 30s and 40s. Overnight lows were in the teens and 20s. Heavy rain storms moved through parts of the territory. Approximately 1 inch of rain was reported in areas north of Memphis, while other areas received up to 3 inches.

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According to the U.S. Drought Monitor, moderate-to-severe drought conditions persisted in many areas, in spite of recent rainfall. Most drought-stricken areas have received less than 50 percent of average rainfall over the past 90-day period. Producers attended, or made plans to attend, various industry economic and agronomic workshops and meetings.

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. Cotton was being delivered to fulfill contracts. Some warehouses reported that the pace of shipments was slower than usual due to a shortage of trucks.

Cold temperatures and wet conditions prevailed during the week. Daytime temperatures were mostly in the 50s. Overnight lows were in the 30s. A cold front, mid-week, brought up to 4 inches of rain to many places in Louisiana and Mississippi. River flood watches were in effect in several counties and parishes.

According to the U.S. Drought Monitor, moderate-to-severe drought persisted in drought stricken areas in northeastern Louisiana and parts of Mississippi, due to lower than average rainfall over the past 90 days. Producers attended, or made plans to attend, various industry workshops and meetings that included topics in areas of agronomic and economic interest to producers.

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 modereate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Interest was best from China, India, and Turkey.

Light to moderate rainfall interfered with field preparations in the Rio Grande Valley and the Coastal Bend. Daytime temperature highs were erratic, ranging from the low 50s to upper 80s. Overnight lows were in mid-40s to low 60s. Local sources reported that conditions were too cold to start spring planting.

Ginning continued in the northern Blackland Prairies. Fieldwork was active, but a cold front brought intermittent rain and caused delays.

The processing of cotton at Kansas gins was slow, due to dry conditions and the potential for flash fires caused by static electricity. Immature bolls also caused ginning to proceed slower than normal. Thousands of modules remained in the fields to be transported to the gin yards.

Kansas and Oklahoma fields were approximately 95 percent harvested. Transporting modules from fields to the gin yards was active in Oklahoma. Ginning was around 50 percent completed. Stalks were shredded and some fertilizer was applied. Producers attended seed meetings and booked seed for the planting season. The western side of Oklahoma remains droughty.

West Texas

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were light. Interest was best from China, India, and Turkey.

Half of the ginning operations had finalized the season in the High Plains. The Lamesa Classing Office moved to a one shift schedule and the Lubbock Classing Office scaled back to a partial two shift schedule. Sample receipts continued to decline. Attention was turned to field tillage. Fields with sandy soils received more preparation than clay fields.

Some stalk shredding was reported; the shredding implement leaves behind small dirt clods that help prevent erosion. As of February 6, no significant precipitation had been received in 90 days in Lubbock. Daytime temperature highs were in the upper 30s to mid-60s and overnight lows were in the single digits to mid-30s. Moderate-to-high fire danger elevation was in effect.

A cold front, which brought wintry precipitation, moved across the state on February 6 and 7, but there was no confirmation that the moisture made it to the ground. The area would benefit from a good general rainfall to help reverse the persistent droughty conditions.

Meetings were held for training and educational purposes. Producers booked seed.

Trading

East Texas

  • In Oklahoma, a heavy volume of color 11 and 21, leaf 3 and better, staple 39 and 40, mike 39-44, strength 27-30, and uniformity 80-82 sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 11 and 21, leaf 3 and better, staple 39 and 40, mike 36-41, strength 27-29, and uniformity 79-81 sold for around 75.75 cents, same terms as above.
  • A light volume of mostly color 31 and better, leaf 1 and 2, staple 37 and longer, mike averaging 40.4, strength 25-30, and uniformity 77-81 sold for around 74.50 cents, same terms as above.
  • A moderate volume of mostly color 23 and better, leaf 2 and 3, staple 36 and 37, mike 37-45, strength 27-32, and uniformity 78-82 sold for around 73.25 cents, same terms as above.
  • A light volume of mostly color 31 and 41, leaf 3 and 4, staple 37, mike 32-41, strength averaging 29.0, uniformity 79-80, and 75 percent extraneous matter sold for around 72.00 cents, same terms as above.

West Texas

  • A light volume of mostly color 21, leaf 2 and 3, staple mostly 35 and longer, mike 36-41, strength 28-32, and uniformity 78-81 sold for around 73.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 21 and 31, leaf 2 and 3, staple 34 and longer, mike 38-45, strength 26-29, and uniformity 78-82 sold for around 72.25 cents, same terms as above.
  • A light volume of mostly color 31, leaf 3 and 4, staple 33-35, mike 36-39, strength 28-31, and uniformity 78-80 sold for around 71.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 13.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies were moderate. Demand was light. Average local spot prices were lower. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC-loan program. No new producer sales were reported as ICE futures prices trended lower in the period.

Producers inquired for 2018-crop contracts. No contracts were signed. Some producers signed into merchant or cooperative marketing pools. No domestic mill activity was reported. Foreign mill inquiries were light. Interest was best from India. A few shippers reported consignment sales to China.

Hot, dry weather continued. No rainfall was recorded in the period. Temperatures were in the low to mid-80s in Yuma, Arizona. Initial planting began the week of January 29. A couple of gins in central Arizona continued to process cotton. Local sources reported that New Mexico and El Paso, Texas producers intended to plant more cotton, as alternative row crop prices for corn and hay were down. Ginning was completed in New Mexico and El Paso, Texas.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Seedbed preparations were underway. Pre-plant irrigations were active. Unseasonably warm and dry conditions continued. Most locations throughout the Valley broke temperature records on Wednesday, February 7 when temperatures reached into the high 70s to low 80s. In some locales, temperatures were 20 degrees warmer than average for this time of year. The Sierra Nevada Mountains snowpack continues to run below average.

American Pima (AP)

Spot cotton trading was inactive. 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. No contracts were signed. Foreign mill inquiries were light and mostly for 2018-crop price discovery.

Shipper’s offering prices for new-crop AP were firm. Interest was best from China, Peru, and India. Sources estimated that approximately 75 percent of the estimated U.S. AP production was committed and sold.

Temperatures were unseasonably warm and conditions were dry in the Far West. No rainfall was recorded in the period. Temperatures were in the high 80s in Yuma, Arizona. Initial planting began last week. Local experts reported a light volume of seedling cotton emergence in the period. Fieldwork was active throughout the region. No planting was reported in California, New Mexico, and El Paso, Texas.

Trading

Desert Southwest

  • In New Mexico, a light volume of mostly color 31, leaf 3 and better, staple 36 and 37, mike averaging 40.1, strength averaging 28.2, and uniformity averaging 79.7 sold for around 74.75 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 31 and better, leaf 4 and better, staple 36 and longer, mike averaging 38.4, strength averaging 27.6, and uniformity averaging 78.9 sold for around 73.50 cents, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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