Weekly Cotton Market Review – USDA

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Average quotations were the same as 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, mike35-36 and 43-49, strength 27.0-28.9, uniformity 81.0-81.9) in the seven designated markets averaged 80.48 cents per pound for the week ending Thursday, March 15, 2018.

The weekly average was the same as last week and up from 74.50 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 81.44 cents Friday, March 9 to a low of 79.91 cents Tuesday, March 13.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 15 totaled 35,337 bales. This compares to 49,573 bales reported last week and 32,767 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,638,358 bales compared to 1,455,679 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 83.53 cents, compared to 85.12 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was inactive. Supplies were light. Producer offerings were moderate. Demand was moderate. Average local spot prices were steady. Trading of CCC-loan equities was inactive.

Mostly sunny to cloudy conditions prevailed over the lower Southeast during the period. Colder daytime high temperatures were observed in the upper 50s to low 60s much of the week, and overnight lows dipped below freezing in some areas of central Alabama and Georgia. Local experts reported that freezing temperatures early in the year has helped reduce nematode populations in fields, but pressure can increase as warmer temperatures arrive approaching planting and pests become active.

Scattered shower activity brought around 1 to 2 inches of moisture to much of north-central Alabama and Georgia, with lesser accumulations observed along coastal areas. Similar conditions were observed across the Carolinas and Virginia during the week with colder daytime highs in the upper 30s to mid-60s.

Widespread rainfall brought around one-half to three-fourths of an inch of moisture to most areas early week. Producers welcomed the precipitation, which helped fortify soil moisture ahead of planting.

According to the U.S. Drought Monitor, the heavier rainfall amounts across the interior of the Southeast ended dryness in northern Alabama and kept conditions from deteriorating elsewhere. However, droughty conditions expanded throughout southeastern Georgia and the northern and southeastern reaches of South Carolina where relatively small rainfall totals were received.

Producers eyed attractive cotton prices compared to competing crops and considered planting options.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 5 and better, and staple 33 and longer for June through August delivery. No sales were reported. Mill buyers also inquired for a moderate volume of 2018-crop cotton, color 51 and better, leaf 5 and better, and staple 34 and longer for fourth quarter 2018 and first quarter 2019 delivery. No sales were reported.

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Domestic cotton shippers continued to report logistical delays and scheduling difficulties delivering cotton to domestic mills and ports as the trucking industry adjusts to federal regulations requiring strict adherence to hours of service due to electronic logging device monitoring. Yarn demand was moderate. Most mills operated five to seven days.

Demand through export channels was moderate. Demand was good throughout the Far East for any discounted styles of 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 steady. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported. Cotton was being delivered to fulfill contracts.

A cold front brought overnight temperatures in the 20s and 30s to the region during the period. Skies were mostly sunny, with daytime highs in the 50s and 60s. Producers reported that saturated soils were hindering all outdoor activities; no fieldwork was reported. River flood warnings remained in effect throughout the region.

Producers were carefully monitoring the effect adverse weather, both at home and abroad, had on commodity prices as they finalized planting decisions. According to the U.S. Drought Monitor, adequate-to-surplus topsoil and subsoil moisture was available in all areas.

South Delta

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

Thunderstorms early week resulted in up to 2 inches of rain throughout the region. Clear skies returned mid-week and daytime temperatures reached into the mid-70s. Overnight lows were in the 40s. According to the U.S. Drought Monitor, adequate-to-surplus topsoil and subsoil moisture was available.

Flooded fields and saturated soils prevented producers from applying burndown chemicals in preparation for spring planting in some areas. Rainfall neutralized the effectiveness of burndown chemicals in some fields where aerial applications had been made. River flood warnings remained in effect; many fields in low-lying areas and along river bottoms were flooded.

No fieldwork was reported. Producers were carefully monitoring commodity prices of competing crops. The U.S. Drought Monitor reported mostly surplus moisture conditions throughout the region.

Trading

North Delta

  • A light volume of 2018-crop CCC-loan equities were booked at around 20.00 cents per pound.

South Delta

  • A light volume of 2018-crop CCC-loan equities were booked at around 20.00 cents per pound.

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 firm. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. Interest was best from China, Taiwan, and Turkey.

Favorable weather conditions allowed producers in the Rio Grande Valley to make excellent progress sowing the 2018 crop. Planting was around 75 percent completed, according to local reports. Most of the irrigated fields had been planted and seedlings had emerged. Planting in the Coastal Bend and Upper Coast had begun and was 20 to 25 percent completed.

In the Blackland Prairies, producers continued fieldwork where soils remained firm enough to support equipment. Ginning and seedbed preparations were underway in Kansas and Oklahoma. Daytime temperatures in Kansas were in the mid-40s to upper 60s and overnight lows were in the teens to low 40s.

A light amount of rain and snow was received in the Oklahoma panhandle early in the reporting period. Dry conditions expanded. Fertilizer and herbicides were applied ahead of sowing activities.

West Texas

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

Windy, dry conditions prevailed during the period. Daytime temperatures were in the low 50s to 80s, with nighttime lows in the mid-20s to mid-50s. Drought conditions continued; although, a light amount of wintry precipitation in the form of rain and snow was received in the northeastern panhandle on March 13. According to local producer reports, subsoil moisture is present about 2 feet down, but rainfall would fortify the topsoil and benefit germination at planting. Some fields were irrigated.

Ginning continued, but some gins finalized pressing services. Planting seed was ordered and some varieties are no longer available. Regional crop meetings and trainings were held.

Trading

East Texas

  • In Oklahoma, a heavy volume of mostly color 21 and 31, leaf 2 and 3, staple 37 and longer, mike 35-48, strength 28-33, and uniformity 80-83 sold for around 82.25 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 31, leaf 3 and 4, staple 36 and longer, mike 38-41, strength 27-29, and uniformity 79-81 sold for around 78.75 cents, same terms as above.
  • In Kansas, a light volume of color 21 and 31, leaf 3, staple 37, mike 28-31, strength averaging 30.0, and uniformity 77-81 sold for around 63.75 cents, same terms as above.

West Texas

  • A light volume of mostly color 11 and 21, leaf 1 and 2, staple 38, mike averaging 39.2, strength 29-30, and uniformity 80-81 sold for around 81.75 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 41 and better, leaf 4 and better, staple 32-34, mike 30-43, strength 25-30, uniformity 76-81, and 25 percent extraneous matter sold for around 73.00 cents, same terms as above.
  • A moderate volume of color 21 and 31, leaf 2 and 3, staple 34 and longer, mike 29-35, strength 25-29, and uniformity 75-80 sold for around 65.75 cents, same terms as above.
  • A light volume of color 12 and better, leaf 2 and 3, staple 35 and 36, mike averaging 27.7, strength averaging 27.8, uniformity averaging 79.1, and 25 percent extraneous matter sold for around 56.00 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were weak. Forward contracting slowed as producer price expectations adjusted upwards to 80.00 cents. No domestic mill activity was reported. Foreign mill inquiries were steady.

Daytime temperatures were in the low 80s in Yuma, AZ. Planting advanced. Ginning continued in central Arizona. Fieldwork was active in the DSW. Snowpack mountain rangesin Arizona are well below average for this time of year. As of February 15, the statewide snowpack for Arizona was at 22 percent of average.

Water storage was below normal in the Arizona major basins. The Salt and Verde River reservoir system stood at 60 percent of capacity, while the San Carlos Reservoir was at 7 percent of capacity. Some rainfall was received in New Mexico an El Paso, TX early in the reporting period. Overall drought conditions expanded in New Mexico.

Late February storms added to the snowpack, but above-average temperatures and windy conditions dried out topsoil moisture. The Elephant Butte reservoir (the Rio Grande’s largest water storage reservoir) in New Mexico stands at 22 percent capacity.

Red flag warnings and wind advisories were in effect for areas in southeastern New Mexico and into El Paso, TX due to gusty winds and low humidity.

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.

Daytime temperatures were in the high 60s to low 70s. Passing showers produced just over one-tenth of an inch early in the reporting period. Heavy rainfall started mid-week, with precipitation amounts of around one-half of an inch. Some areas of the Valley had thunderstorm activity and hail. The storms augmented the snowpack in the Sierra Nevada Mountains. No planting activity was reported.

American Pima (AP)

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light and mostly for 2018-crop cotton. According to the Foreign Agricultural Service export report, sales continued steady, with 542,500 bales committed for week ending March 8. Sales for marketing year 2018 were reported at 41,100 bales.

Temperatures were in the 60s and 70s in the Far West. Light precipitation amounts were recorded for Arizona, New Mexico, and El Paso, TX early in the period. A series of storms brought precipitation amounts of one-half of an inch to three-quarters of an inch to the San Joaquin Valley (SJV) of California.

The Sierra Nevada Mountain range gained several feet of fresh snow. Rain remains in the forecast. Planting advanced in Yuma, AZ. No planting activity was reported in the SJV. It was uncertain how much acreage would be planted to cotton. Some sources reported a slight increase compared to last year.

Trading

Desert Southwest

  • A heavy volume of mostly color 21 and better, leaf 2 and better, and staple 36 and longer sold for around 125 points off ICE May futures, uncompressed, FOB warehouse.
  • A light volume of color 21 and 31, leaf mostly 4, and staple mostly 39 sold for around 475 points off ICE May futures, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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