Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Images

Average quotations were 33 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 73.69 cents per pound for the week ending Thursday, February 15, 2018.

AgFax Weed Solutions


The weekly average was down from 74.02 last week, but up from 73.46 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 74.24 cents Friday, February 9 to a low of 72.91 cents Thursday, February 15. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 15 totaled 54,051 bales. This compares to 39,562 bales reported last week and 61,030 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,394,763 bales compared to 1,301,741 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 76.77 cents, compared to 77.63 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #17 FOR UPLAND COTTON

The Department of Agriculture’s Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. The quota will be established on February 22, 2018, allowing importation of 13,720,590 kilograms (63,018 bales) of upland cotton.

Quota number 17 will be established as of February 22, 2018, and will apply to upland cotton purchased not later than May 22, 2018, and entered into the U.S. not later than August 20, 2018. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 2017 through December 2017, the most recent three months for which data are available.

Future quotas, in addition to the quantity announced, will be established if price conditions warrant.

Southeastern Markets Regional Summary

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

Mostly overcast conditions prevailed across the entire Southeast region during the period and variable daytime high temperatures were observed in the upper 50s to mid-70s most of the week. A band of thunderstorms brought heavy rainfall to areas throughout Alabama, the Florida panhandle, and portions of south Georgia over the weekend.

Rainfall totals measured from 1 to 4 inches in most areas, with locally heavier downpours of as much as 10 inches observed in the Florida panhandle. Around one-quarter of an inch to one inch of precipitation was received throughout the central Carolinas and Virginia, with heavier accumulations observed along the Atlantic coastal areas.

According to the U.S. Drought Monitor, moderate, severe, and extreme drought conditions were reduced or eliminated from Virginia to the Gulf Coast as a result of widespread two-week rainfall totals of 4 to 8 inches across the region.

Fieldwork was at a standstill, due to wet conditions in most areas. Ginning was winding down. Most remaining gins were operating on gin days as they waited to receive the final modules from producers.

More on Cotton


Textile Mill

Domestic mill buyers inquired and purchased a moderate volume of color 41, leaf 4, and staple 35 and 36 for June through October delivery. Mill buyers also inquired for a moderate volume of color 31, leaf 3, and staple 36 for April through July delivery. Yarn demand was moderate. Most mills operated five to seven days.

Some domestic cotton shippers reported delays and scheduling difficulties delivering cotton to mills as truckers adjust to the recent federal mandate requiring most long-distance truck drivers to use electronic logging devices, which track their drive time and hold them in more rigid compliance with regulations.

Demand through export channels was moderate, but had improved as ICE futures trended lower. Agents for mills in Bangladesh and Vietnam inquired for a moderate volume of color 31, leaf 3 and 4, and staple 35-37 for nearby shipment.

Representatives for mills in India and Pakistan inquired for a moderate volume of color 41, leaf 4, and staple 36 for nearby shipment. Inquiries for low mike cotton have increased throughout the Far East as mills run production tests to determine how these qualities will perform in plants.

Trading

  • Mixed lots containing color mostly 31 and 41, leaf 2-5, staple 34-38, mike 43-49, strength 28-30, and uniformity 80-82 sold for around 78.50 cents per pound, FOB car/truck (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color 31, 41, and 51, leaf mostly 3 and 4, staple 36-38, mike 40-49, strength 27-29, and uniformity 80-82 sold for around 78.25 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 weak. 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.

A warming trend brought a wide range of temperatures to the region during the week. Daytime temperatures were in the 30s and 70s. Overnight lows were in the 30s and 40s. Heavy rain storms moved through parts of the territory and overcast conditions will persist generally into next week.

Approximately 2 inches of rain was reported in most places, while localized areas received up to 3 inches. Producers attended, or made plans to attend, various industry economic and agronomic workshops and meetings.

According to the U.S. Drought Monitor, moderate-to-severe drought conditions contracted sharply in many areas, due to recent rainfall. However, most drought-stricken areas have received less than 75 percent of average rainfall over the past 90-day period and more rainfall is necessary to fully alleviate soil moisture deficits before spring planting begins.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were weak. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. A few warehouses reported minor delays, due to a shortage of trucks.

An extended storm front brought widely varying temperatures to the region during the week. Daytime temperatures were in the low 40s to the upper 70s. Overnight lows were in the 30s to 60s. Rain storms of varying intensity moved through the territory throughout the week. Approximately 2 inches of rain was reported in most places, while localized downpours brought up to 3 inches or more.

River flood watches remained in effect in several counties and parishes. Producers attended, or made plans to attend, various industry workshops and meetings that included topics in areas of agronomic and economic interest to producers.

According to the U.S. Drought Monitor, areas of moderate-to-severe drought in northeastern Louisiana and parts of Mississippi decreased dramatically as a result of the recent moisture, but rainfall accumulations over the past 90 days remain below average.

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

Fields were soggy in south Texas and delayed field preparations ahead of planting. Another weather front brought more rainfall to the region mid-week. According to local reports, pre-planting fieldwork activities are on schedule. Most planting will occur in March. Widespread rainfall was received across central and east Texas and slowed field preparations. Ginning continued.

In Kansas and Oklahoma, ginning continued uninterrupted. Modules were transported from the fields to the gin yards as space became available.

West Texas

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

The official rain gauge for Lubbock recorded no significant rainfall for 97 days in a row on February 14, according to local news sources. Rain chances were in the nearby forecast. Windy conditions prevailed at the end of the period and left soils depleted of moisture. Daytime temperature highs were in the low 30s to low 80s, and nighttime lows were in the teens to low 50s. Dryland fields were too dry to prepare seedbeds.

Some shallow tillage was completed on irrigated fields with sandy soils. Local reports indicated that cattle are turned out to graze wheat at this time of year, but conditions are so dry that wheat is barely visible and has possibly died. Most modules have been delivered to the gin yards. The Lubbock Classing Office reported around 70 percent of the gins in the territory have completed the season.

Progress at the Lamesa Classing Office was similar. The Abilene Classing Office continued providing grading services on three shifts. The majority of the ginning activity continued in the panhandle. Meetings and crop-conferences were held. Planting seed was booked.

Trading

East Texas

  • In Oklahoma, a light volume of color 21, leaf 3 and better, staple 37 and longer, mike averaging 38.5, strength 27-31, and uniformity 79-81 sold for around 76.00 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of color 31 and better, leaf 4 and better, staple 36 and longer, mike 31-51, strength 26-34, and uniformity 78-84 sold for around 74.25 cents, same terms as above.
  • A moderate volume of mostly color 23 and better, leaf 2 and 3, staple 36 and 37, mike averaging 37-45, strength 27-32, and uniformity 79-82 sold for around 73.25 cents, same terms as above.
  • In Kansas, a moderate volume of mostly color 31 and better, leaf 2 and 3, staple 35, mike 32-39, strength 27-29, and uniformity 79-80 sold for around 71.00 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 18.00 to 19.75 cents.

West Texas

  • A moderate volume of mostly color 21 and 31, leaf 1 and 2, staple mostly 36 and 37, mike 38-42, strength 28-31, and uniformity 79-80 sold for around 76.25 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 21 and 31, leaf 3 and better, staple 32-35, mike 33-37, strength 24-29, and uniformity 75-79 sold for around 63.00 cents, same terms as above.
  • A moderate volume of mostly color 11 and 12, leaf 1 and 2, staple 35-37, mike 25-35, strength 25-32, and uniformity 75-80 sold for around 61.00 cents, same terms as above.
  • A moderate volume of color 22 and better, leaf 2 and 3, staple 32-36, mike 24-37, strength 24-30, and uniformity 76-80 sold for around 58.25 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was moderate. Average local prices were weak. Producers delivered 2017-crop cotton to the co-op, merchant marketing pools, or into the CCC-loan program. Some producers signed into merchant or cooperative marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures dropped from the high 80s to the low 70s and high 60s in Yuma, Arizona. Planting continued in Yuma. A couple of gins in central Arizona continued to process cotton. Local contacts were in general agreement with the reported planting intentions released by National Cotton Council for Arizona and New Mexico. Irrigation water availability is a concern for growers in central Arizona and Hudspeth County, Texas.

San Joaquin Valley (SJV)

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

Cloudy, breezy, and cooler conditions produced scattered shower activity in the Valley and produced snow in elevations over 5,000 feet in the Sierra Nevada Mountain range mid-week. Temperatures briefly dropped down into the low 60s. Clear, sunny skies returned late in the period. Roller gins continue to operate.

Pre-plant activities continued. Industry representatives were supportive of the reported planting intentions released by the National Cotton Council for California. Lack of snowpack and available irrigation water were concerning.

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.

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. Planting continued in Yuma, Arizona. Ginning continued in Arizona and California. Fieldwork was active throughout the region.

Industry representatives were in general agreement with recently published California planting acreage intentions compiled by the National Cotton Council. Private estimates indicated that American Pima acreage could be lower than forecasted. Irrigation water availability remains a concern for the Far West.

Trading

Desert Southwest

  • In Arizona, a moderate volume of color 11 and 21, leaf 2 and better, mostly staple 36 and longer, mike averaging 43.0, strength averaging 30.7, and uniformity averaging 81.5 sold for around 125 points on ICE March futures, uncompressed, FOB warehouse.
  • A moderate volume of mostly color 11, leaf 1 and 2, staple 35-36, mike averaging 46.3, strength averaging 29.6, and uniformity averaging 80.7 sold for around even ICE March futures, same terms as above.
  • A light volume of mostly color 21 and better, leaf 1 and 2, staple 35-39, mike averaging 47.2, strength averaging 31.1, and uniformity averaging 81.0 sold for around 77.00 cents per pound, same terms as above.
  • In New Mexico, a light volume of mostly color 31 and better, leaf 3 and better, staple 32 and longer, mike 35-42, strength 27-30, and uniformity averaging 79.5, with 25 percent bark sold for around 72.00 cents, FOB car/truck (compression charges not paid).
  • A light volume of color 41, leaf 2 and 3, staple 33 and 34, mike averaging 41.9, strength averaging 27.8, and uniformity averaging 79.0 sold for around 68.00 cents, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

The Latest


Send press releases to Ernst@Agfax.com.

View All Events


Send press releases to Ernst@Agfax.com.

View All Events