Weekly Cotton Market Review – USDA

Average quotations were 288 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 90.27 cents per pound for the week ending Thursday, June 14, 2018.

This is the highest weekly average since week ending January 19, 2012, when the average was 90.39 cents. The weekly average was up from 87.39 last week and 71.38 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 90.94 cents Tuesday, June 12 to a low of 89.58 cents Thursday, June 14.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 14 totaled 8,162 bales. This compares to 14,843 bales reported last week and 268 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 2,033,401 bales compared to 1,562,681 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 93.41 cents, compared to 93.72 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #8 FOR UPLAND COTTON June 14, 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 June 21, 2018, allowing importation of 13,556,609 kilograms (62,264 bales) of upland cotton.

Quota number 8 will be established as of June 21, 2018, and will apply to upland cotton purchased not later than September 18, 2018, and entered into the U.S. not later than December 17, 2018. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period February 2018 through April 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 slow. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. Producers took advantage of higher ICE futures to book a light volume of 2018 and 2019-crop cotton.

Mostly hot and dry conditions under partly cloudy skies were observed across the entire Southeastern region during the period. Daytime highs were in the mid-80s to low 90s from the Gulf to Atlantic coastal regions. Isolated thundershowers brought moisture to portions of north and south Alabama, south Georgia, and the Florida panhandle during the week.

Cotton Commentary


Weekly accumulated rainfall totals generally measured less than one inch of precipitation and many locals did not receive moisture. The warm and sunny weather allowed soft soils to firm and producers re-entered fields to finish planting the last remaining acres of cotton.

Local experts reported that producers were encouraged by strong futures prices; some land was pulled from competing crops for additional cotton acreage as producers continue planting cotton beyond the window for normal planting dates. Overall, planting was completed in most areas.

Producers applied layby herbicides to fields. In Alabama, some of the oldest-planted fields were treated for plant bugs. In south Georgia, a few fields were treated for aphids and the application of plant growth control regulators had begun.

Isolated shower activity brought rainfall to localized areas of the eastern Carolinas and Virginia during the period. Most areas missed significant precipitation, but some coastal plain areas of the Carolinas received 1 to 2 inches of moisture during the week. Hot and dry conditions during most of the period helped soft soils to firm; many fields remained saturated due to excessive moisture received in recent weeks.

Producers were completing planting activity and applying herbicides in fields firm enough to support equipment. Local experts reported pressure from thrips had increased in the Pee Dee region. Producers scouted fields for aphids, plant bugs, and spider mites. Squaring advanced across the Southeast.

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. Most mills operated five to seven days. The undertone from mill buyers remained cautious.

Demand through export channels was moderate. Agents for mills in Mexico purchased a light volume of 2018-crop cotton, color 42 and 51, leaf 4, and staple 34 and longer for October through December delivery.

Trading

  • A light volume of color mostly 31 and 41, leaf 3-5, staple mostly 35-37, mike 37-52, strength 28-32, and uniformity 80-83 sold for around 81.50 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Variable climatic conditions allowed the crop to make good progress during the week. Daytime high temperatures were in the mid-90s and overnight temperatures in the low 70s. Scattered showers brought rain to parts of the region. A few places received heavy rain showers, while other areas remained dry.

A general, soaking rain would be very beneficial for promoting normal plant development. Pressure from plant bugs and bollworm moths was building. Producers were also giving much attention to weed control. Squaring expanded rapidly as a result of the high temperatures and was well ahead of the five-year average.

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.

The crop made excellent progress during the week under favorable weather conditions. Daytime high temperatures were in the mid-90s and overnight temperatures in the low 70s. Light, scattered showers brought approximately 1 inch of rain to the parts of the region. More rainfall was needed on dryland cotton.

Insect pressure from plant bugs was reported in some fields. Plant growth regulators were applied to some early-planted fields in Louisiana. The highly variable soil moisture conditions made weed control a challenge in both wet and dry fields. Squaring expanded rapidly to move ahead of the five-year average.

AgFax Weed Solutions


Trading

North Delta

  • A light volume of color 41 and better, leaf 5 and better, staple 36 and longer, mike 35-46, strength 28-35, and uniformity 79-83 traded for around 88.25 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Delta

  • A light volume of color 42 and better, leaf 5 and better, staple 36 and longer, mike 33-50, strength 28-34, and uniformity 78-83 traded for around 89.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

Southwestern Markets Regional Summary

East Texas

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

Fields were in full bloom and setting bolls in the Rio Grande Valley, according to the Pest Cast newsletter published on June 8. Much needed rainfall was received on June 9, but too late for some stands that had already reached cutout. The first bale of the nation was delivered in Willacy County on June 13.

The first bale will be auctioned on September 13, and the proceeds will be used for scholarship funds for students attending Texas State Technical College. Irrigation was underway in the Upper Coast, and stands had begun to bloom in the Coastal Bend. Producers sprayed for spider mites and fleahoppers in the Blackland Prairies.

Stands progressed in some areas, but struggled in other locations that lacked rainfall. Rain is needed to help advance the dryland stands. Fields were saturated in Kansas. Extreme amounts of widespread hail, coupled with additional rainfall, interfered with late-season planting activities.

Some fields were replanted early in the reporting period. Stands had begun to emerge and some were at the 1 to 3 true leaf stage. Some producers sprayed for thrips.

Although ginning continued, the final modules were on the gin yard. In Oklahoma, stands progressed but needed more moisture. Weed pressure was light, mirroring light to no rainfall.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was very light. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were light-to-moderate. Interest was best from Korea and India.

Daytime highs were in the mid-90s to low 100s. Beneficial rain was received the evenings of June 7 and 10, with intermittent storms throughout the reporting period. Rainfall came too late for some dryland fields that failed to support stand establishment.

Stands that progressed were at the emerged to 5 true leaf stage in the panhandle. Fields were scouted and local reports indicated that treatments for thrips were applied to some fields.

Trading

East Texas

  • In Kansas and Oklahoma, a light volume of mostly color 31, leaf 2 and 3, staple 36, mike 39-41, strength 27-29, uniformity 80-82, and 50 percent extraneous matter sold for around 80.50 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 34 and 44, leaf 3-6, staple 35 and 36, mike 26-45, strength 24-30, uniformity 77-82, and 50 percent extraneous matter sold for around 58.00 cents, same terms as above.
  • In Kansas, Oklahoma, and Texas, a mixed lot containing a light volume of mostly color 31 and better, leaf 3 and 4, staple 33-36, mike 30-43, strength 24-30, uniformity 76-82, and 75 percent extraneous matter sold for around 68.00 cents, same terms as above.

West Texas

  • A light volume of mostly color 32, leaf 2 and 3, staple 31 and 32, mike 41-43, strength averaging 26.7, and uniformity 77-78 sold for around 67.55 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 22 and better, leaf 2, 3, and 4, staple 35, mike averaging 37.5, strength averaging 29.1, uniformity 77-82, and 25 percent extraneous matter sold for around 84.00 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 higher. Producers made inquiries for 2019-crop contracts. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the high 100s. Remnants from Tropical Storm Bud is expected to increase humidity near monsoon levels and afternoon thunderstorms for parts of central and eastern Arizona later in the week. The crop made good progress in Arizona. Fieldwork was active. Producers attended field crop meetings.

New Mexico producers and residents were hopeful that much needed moisture will arrive soon from Tropical Storm Bud. The cotton crop struggled in some areas of New Mexico as hot, dry conditions prevailed. The crop made good progress in El Paso, Texas.

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.

Daily temperatures steadily rose from the high 80s to high 90s for most of the period. Triple digit temperatures of around 103 to 105 degrees made an appearance late in the period. The crop made excellent progress. Cotton stands were very uniform and healthy. Fieldwork was active with fertilizing and irrigating.

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. According to the Foreign Agricultural Service’s Export Sales report, approximately 634,100 bales of 2017-crop AP was committed for the week ending June 7. Sales for marketing year 2018 were reported at 98,700 bales.

The Far West crop advanced under hot, dry conditions. Daytime high temperatures were in the high 80s to high 100s. The crop made good progress, with little to no insect pressure reported. Producers irrigated and fertilized. Producers attended field crop meetings.

Save the date: The Visalia Classing Office will host the annual American Pima Guide Box Matching on July 10.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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