Weekly Cotton Market Review – USDA

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Average quotations were 131 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 81.53 cents per pound for the week ending Thursday, May 10, 2018.

The weekly average was up from 80.22 last week and 74.33 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 82.71 cents Friday, May 4 to a low of 80.33 cents Thursday, May 10. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 10 totaled 35,776 bales.

This compares to 25,892 bales reported last week and 3,507 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,912,481 bales compared to 1,556,676 bales the corresponding week a year ago.

The ICE July settlement prices ended the week at 84.56 cents, compared to 84.50 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #3 FOR UPLAND COTTON May 10, 2018

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 May 17, 2018, allowing importation of 13,170,669 kilograms (60,492 bales) of upland cotton.

Quota number 3 will be established as of May 17, 2018, and will apply to upland cotton purchased not later than August 14, 2018, and entered into the U.S. not later than November 12, 2018. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2017 through February 2018, 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.

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Southeastern Markets Regional Summary

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

Planting activity advanced at a rapid pace across the lower Southeast as sunny and dry weather prevailed across the region during the period. Daytime high temperatures were in the low to upper 80s.

Producers took advantage of the ideal weather conditions to complete fieldwork. The warm temperatures will help advance seed germination. However, in some areas of Georgia, planting on dryland fields will stop soon in areas where soil moisture remains insufficient.

According to the U.S. Drought monitor, moderate-to-severe drought conditions persisted in portions of south Alabama, coastal Georgia, and South Carolina. Producers in these areas would welcome a soaking rainfall to replenish subsoil moisture.

Sunny to partly cloudy conditions prevailed across the Carolinas and Virginia during the period, with variable daytime high temperatures in the upper 70s to upper 80s. Over the weekend, scattered showers brought from one-quarter of an inch to two inches of moisture to portions of eastern North Carolina and Virginia.

Planting activity was gaining momentum, but was delayed in areas due to wet conditions. Across the Southeast, seedlings were emerging in the earliest-planted fields.

According to the National Agricultural Statistics Service’s Crop Progress report released May 7, planting had reached 32 percent completed in Alabama, 22 in Virginia, 20 in Georgia, 14 in North Carolina, and 12 percent completed in South Carolina.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2018-crop cotton, color 41, leaf 4, and staple 34 for fourth quarter 2018 and first quarter 2019 delivery. No sales were reported. Yarn demand was moderate. Most mills operated five to seven days. Load out dates at most warehouses were reported at 8 to 10 weeks.

Demand through export channels was moderate. Korean mill buyers inquired for a moderate volume of 2018-crop cotton, color 31 and better, leaf 3 and better, and staple 36 and longer for fourth quarter 2018 shipment. Agents for mills in Pakistan, Taiwan, and Turkey continued to inquire for low micronaire styles of cotton out of the Southwestern markets. No sales were reported.

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 slow. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

Warm and sunny climatic conditions allowed producers to make good progress with planting. Seasonably mild overnight temperatures were in the 50s and 60s. Daytime highs were in the 80s. No rain was reported. Producers reported that fieldwork, including burndown, fertilizer applications, and planting was underway.

According to the National Agricultural Statistics Service’s Crop Progress report released May 7, planting was at 19 percent in Arkansas, 37 in Missouri, and 10 percent completed in Tennessee.

Planting in Arkansas and Missouri was about one week behind the five-year average, but was right on schedule in Tennessee. Producers made excellent progress and planting was expected to advance rapidly going forward.

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. No forward contracting was reported. Cotton was being delivered to fulfill contracts.

Ideal weather conditions allowed producers to make excellent planting progress. Overnight temperatures were in the 50s and 60s. Daytime highs were in the 80s. Up to 1 inch of rain was reported in a few areas. Producers reported that fieldwork, including burndown, fertilizer applications, and planting was well underway.

According to the National Agricultural Statistics Service’s Crop Progress report released May 7, planting was at 27 percent in Louisiana, about two weeks behind the five-year average, and slightly behind in Mississippi at 21 percent completed.

Producers made excellent progress and planting was expected to advance rapidly in the days ahead.

Trading

North Delta

  • A moderate volume of CCC-loan equities traded at around 26.00 cents per pound.

South Delta

  • No trading activity was reported.

Southwestern Markets Regional Summary

East Texas

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Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was active. Foreign inquiries were light-to-moderate. Interest was best from Indonesia, Pakistan, and Taiwan.

Insect monitoring was underway in the Rio Grande Valley. Stands reached full bloom. Plants were 7-leaves up to forming pinhead squares in the Upper Coast. Replanted acres have begun to emerge. Spraying for weeds was active.

Planting continued in the Blackland Prairies and stands had begun to establish. Stands made good progress with daytime temperature highs in the low 70s to the low 90s and overnight lows in the mid-50s to upper 60s. Replanting continued in some fields. Insect pressures have been low, according to local reports. Weed populations are problematic, but hopes are that herbicides will activate now that temperatures have warmed.

Kansas producers made plans to plant more cotton coming off the stellar yields in 2017, but soil temperatures need to warm. Temperature highs were in the low 70s to low 90s, and overnight lows were in the upper 40s to upper 60s.

Planting was 2 percent completed and similar to this time last season at 1 percent, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report published on May 7. Cotton planting will rapidly expand after producers finish planting corn. Seed availability is a concern.

Planting began in southwestern Oklahoma on irrigated fields. Dryland fields need a beneficial rain ahead of planting. Herbicides have been applied to help manage weed overgrowth. Fertilizer was applied. Planting was 8 percent completed, compared to 21 percent the previous season, according to NASS.

West Texas

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher. Producer interest in forward contracting was light, due to droughty conditions. Trading of CCC-loan equities was active. Foreign inquiries were light-to-moderate. Interest was best from Indonesia, Pakistan, and Taiwan.

Dry, windy conditions prevailed, with daytime highs in the mid-80s to mid-90s and overnight lows in the upper 40s to upper 60s. Isolated showers brought light amounts of precipitation to some areas, but were not enough to alleviate droughty conditions.

Multiple management practices were underway depending on soil types and soil moisture levels. Planting expanded on irrigated acreage. Dryland acres will be planted in a couple of weeks in most areas; although, a limited amount were planted in the panhandle, according to local sources.

Some sowed seed into dry ground and hoped for May rainfall to help germination. Cover crops were terminated. Burndown herbicides were applied to help control weed growth.

Texas A&M Agrilife extension specialists and crop consultants monitored for potential pest infestations, including wireworms that can cause feeding damage to cotton seedlings during periods of drought.

Trading

East Texas

  • In Oklahoma, a moderate volume of mostly color 31 and better, leaf 3 and better, staple 35-38, mike 33-45, strength 28-32, uniformity 79-82, and 25 percent extraneous matter sold for around 78.75 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 33 and better, leaf 4 and better, staple 36 and 37, mike averaging 45.8, strength 29-31, uniformity 80-82, and 50 percent extraneous matter sold for around 64.50 cents, same terms as above.
  • In Kansas, a light volume of mostly color 31 and better, leaf 5 and better, staple 36 and 37, mike averaging 34.9, strength 26-29, uniformity 79-81, and 75 percent extraneous matter sold for around 67.75 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 11.00 to 25.25 cents.

West Texas

  • A light volume of color 11 and 21, leaf 1 and 2, staple 37-38, mike 29-37, strength 27-29, and uniformity 79-80 sold for around 66.75 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 31 and better, leaf 2 and 3, staple 35-37, mike 30-38, strength averaging 28.9, and uniformity 77-81 sold for around 64.00 cents, same terms as above.
  • A light volume of color 24 and better, leaf 2 and 3, staple 34 and longer, mike 34-41, strength 26-27, uniformity 78-80, and 50 percent extraneous matter sold for around 52.00 cents, same terms as above.
  • A moderate volume of CCC-loan equities traded for 11.00 to 12.50 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

The crop made excellent progress, with the earliest-planted cotton reaching pinhead squares. According to the University of Arizona Cooperative Extension Service, heat units were seven days ahead of normal in most production locations. Insect pressures were light.

The National Agricultural Statistics Service (NASS) Arizona Weekly Crop Progress and Condition report for week ending May 6, indicated 71 percent of the Arizona crop has been planted, with 50 percent of the crop emerged.

In New Mexico, local sources reported planting made good progress and was over 70 percent completed. Some wind damage was reported and replanting was active. Cotton planting was 40 percent completed in New Mexico, with 25 percent emergence. Topsoil and subsoil moisture was rated mostly short to very short, according to NASS.

Late week, red flag warnings were in effect for central Arizona, southwestern New Mexico, and El Paso, TX due to gusty winds and low humidity.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light for color 21, leaf 2, and staple 37 and longer. New-crop inquiries were made for the purpose of price discovery.

Temperatures were mostly in the 70s and 80s, with breezy conditions. The crop made excellent progress. No insect pressures were reported.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light and mostly for new-crop price discovery.

According to the Foreign Agricultural Service export report, sales continued steady, with 588,800 bales committed for week ending May 3. Sales for marketing year 2018 were reported at 44,200 bales.

Hot, dry conditions advanced the Far West crop. The crop progressed normally, with little to no insect pressure reported. Strong winds and low humidity increased wildfire danger in central Arizona, New Mexico, and El Paso, TX. Planting neared completion in New Mexico and El Paso, TX.

Trading

Desert Southwest

  • A light volume of New Mexico cotton mostly color 31, leaf 3, staple 33-36, mike averaging 38.5, strength averaging 27.4, and uniformity averaging 78.3 sold for around 75.00 cents per pound, FOB car/trucks (compression charges not paid).

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

 


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