Weekly Cotton Market Review – USDA

©Debra L Ferguson Stock Photography

Average quotations were 134 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 80.19 cents per pound for the week ending Thursday, May 17, 2018.

The weekly average was down from 81.53 last week, but up from 78.53 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 79.64 cents Monday, May 14 to a high of 81.02 cents Thursday, May 17. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 17 totaled 33,669 bales. This compares to 35,776 bales reported last week and 4,198 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,946,150 bales compared to 1,560,874 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 85.03 cents, compared to 84.56 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #4 FOR UPLAND COTTON May 17, 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 24, 2018, allowing importation of 13,123,605 kilograms (60,276 bales) of upland cotton.

Quota number 4 will be established as of May 24, 2018, and will apply to upland cotton purchased not later than August 21, 2018, and entered into the U.S. not later than November 19, 2018. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period January 2018 through March 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.

Southeastern Markets Regional Summary

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

Planting advanced at a rapid pace across the lower Southeast early in the period as sunny and dry conditions prevailed over the weekend. Daytime high temperatures were in low 90s, but dipped to the upper 70s to 80s during the week as overcast conditions and wet weather entered the region.

Producers welcomed widespread shower activity during the week, which brought one-half to one inch of weekly accumulated moisture to localized areas throughout Alabama, the Florida Panhandle, and central Georgia. Heavier accumulations of up to 2 inches of precipitation were received along the Atlantic coastal areas of Georgia.

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In Alabama, producers had begun irrigating emerging cotton in areas that had missed rainfall.

In Georgia, the beneficial moisture will allow dryland farmers to resume planting where soils had become hard and dry. Some fields will have to be replanted where moisture arrived too late to invigorate emerging seedlings, and also some earlier-planted fields where cool soils hindered good plant populations at germination.

Planting activity expanded rapidly in the Carolinas and Virginia as mostly fair to sunny conditions prevailed early in the period with daytime high temperatures in the mid-80s to mid-90s. The hot and dry conditions slowed planting activity in some areas of the Carolinas where soil moisture conditions deteriorated and producers waited for rainfall. Reports indicated irrigation was utilized every day in fields where available.

Later in the week, a storm system drifted north along the Atlantic Coast and produced shower activity over the Carolinas and Virginia. Producers welcomed wet weather, which helped replenish sub-soil moisture. Rainfall totals measured from one-quarter of an inch to one-half of an inch in some areas. Wet weather, which is in the near term forecast, will idle planters.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2018-crop cotton, color 51 and better, leaf 5 and better, and staple 32 and longer for April through October 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 and had tapered due to higher ICE futures prices. Agents throughout the Far East made initial inquiries for a moderate volume of 2018-crop cotton, color 41, leaf 4, and staple 36 and longer for first quarter 2019 shipment.

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 lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts

Favorable climatic conditions allowed producers to make excellent progress with planting. Daytime high temperatures in the mid-90s were a few degrees above average for this time of the year. Overnight temperatures in the 70s were also several degrees above the seasonal average.

Light, isolated thundershowers were received early week, but most producers reported that fieldwork, particularly fertilizer applications and planting, was not significantly impacted. A storm front late week brought heavy rain showers to the Memphis territory; up to 1inch of rain was reported generally. All outdoor activities were idle until fields firmed enough to support equipment.

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.

Favorable weather conditions allowed producers to make excellent progress with planting. Daytime high temperatures were in the low 90s, or about average for this time of the year. Overnight temperatures in the 70s were above the seasonal average. No rainfall was received, and most producers reported that all aspects of fieldwork, including burndown, fertilizer applications, and planting advanced normally.

No emerged cotton was reported. Producers made excellent progress sowing the 2018 crop, however, a storm front late week brought heavy rain showers to the region. Up to 1 inch of rain was reported generally. All outdoor activities were idle until fields firmed enough to support equipment.

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 active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was active. Foreign inquiries were light.

Some stands exhibited heat stress in south Texas, and rainfall would help the plants improve. Stands were irrigated. Drought has negatively impacted dryland acres in Willacy county cotton fields, leaving some fields fallow and others failing to establish, according to the Texas A&M Extension Pest Cast, released on May 11.

Integrated Pest Management (IPM) experts continued to help producers manage plant pests’ populations including the fleahopper, aphid, red spider mite, whitefly, and thrips in the Coastal Bend, Upper Coast, and Rio Grande Valley. IPM specialist continued to monitor for bollworms and resistance to one or more Bt genes in Bt varieties in parts of Texas.

Fields were soggy in the Blackland Prairies and delayed replanting. Some areas had received 6 inches of rainfall. Stands had emerged and needed dry, sunny conditions to advance. Planting neared completion.

Beneficial rains were received in most parts of the Oklahoma cotton-growing areas. Seedlings emerged quickly and uniformly, according to local reports.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light, due to droughty conditions. Trading of CCC-loan equities was inactive. Foreign inquiries were light.

Dry, windy conditions prevailed with daytime highs in the mid-80s to upper 90s, and overnight temperatures in the low 40s to upper 60s. Scattered afternoon storms brought rain, hail, and gusting winds to the cotton-growing areas. Estelline and other areas received severe hail storms and up to 5 inches of moisture early in the reporting period. Parts of Lubbock received rainfall the evening of May 15. Planting expanded when outside conditions were favorable. Fields were irrigated and some had emerged.

Trading

East Texas

  • In Oklahoma, a moderate volume of mostly color 22 and better, leaf 3 and better, staple 35 and 36, mike 37-43, strength 29-33, and uniformity 78-82 sold for around 80.50 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of mostly color 21 and 31, leaf 3 and better, staple 36 and longer, mike 30-44, strength 27-33, uniformity 79-83, and 25 percent extraneous matter sold for around 77.00 cents, same terms as above.
  • A mixed lot containing a moderate volume of mostly color 13 and 23, leaf 2 and 3, staple 34-36, mike28-48, strength 26-31, uniformity 78-82, and 50 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 24.50 cents.

West Texas

  • A light volume of color 21 and 31, leaf 2 and 3, staple 34 and longer, mike 28-33, strength 25-28, and uniformity 76-82 sold for around 60.25 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 21 and 31, leaf 4 and better, staple 36 and 37, mike 30-36, strength 26-28, uniformity 79-80, and 75 percent extraneous matter sold for around 66.00 cents, same terms as above.
  • A light volume of mostly color 11, leaf 2 and 3, staple 34-36, mike 25-28, strength averaging 25.3, and uniformity 75-80 sold for around 52.00 cents, same terms as above.
  • A light volume of mostly color 41, leaf 3, staple 33, mike averaging 23.5, strength averaging 25.6, uniformity averaging 77.3, and 50 percent extraneous matter sold for around 45.50 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. Forward contracting was active, as December ICE futures maintained at the 80.00 cents range. No domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures lowered into the 90s in Arizona. The crop continued to make good progress. No significant pest pressures were reported. Fire danger conditions continued as strong winds were reported in New Mexico and El Paso, TX. Planting was completed. Local sources reported the young crop was in good condition. In Hudspeth County, TX, some concern was expressed in high salinity levels in irrigation water. Gin maintenance and repairs were active.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. New-crop inquiries were made for the purpose of price discovery.

Temperatures were near normal mostly in the 80s and dropped into the 70s late in the period, as clouds moved into the Valley. The crop progressed normally. 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 was reported. Domestic mills inquired for 2018-crop cotton. A light volume of new sales were reported. Foreign mill inquiries were light and mostly for new-crop price discovery.

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 New Mexico, and El Paso, TX. Planting was completed in the Far West. Sources in El Paso, TX commented that there was a slight increase in AP acreage, as more irrigation water became available and was released to growers prior to planting. Gin maintenance and repairs were active.

Save the date: The Visalia Classing Office will host the annual American Pima guide box matching on July 10.

Trading

Desert Southwest

  • A heavy volume of 2018-crop cotton, contract base quality of color 31, leaf 3, and staple 36 and longer was contracted at around even on ICE  December futures.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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