Weekly Cotton Market Review – USDA

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Spot quotations averaged 46 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, and uniformity 81.0-81.9) in the seven designated markets averaged 79.19 cents per pound for the week ending Thursday, August 30, 2018.

The weekly average was up from 78.73 last week and from 69.05 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 78.10 cents Friday, August 24 to a high of 80.10 cents Tuesday, August 28.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 30 totaled 2,719 bales. This compares to 917 reported last week and 2,566 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 11,266 bales compared to 16,659 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 82.42 cents, compared to 81.73 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #19 FOR UPLAND COTTON August 30, 2018

The Department of Agriculture’s Commodity Credit Corporation today 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 September 06, 2018, allowing importation of 13,543,665 kilograms (62,205 bales) of upland cotton.

Quota number 19 will be established as of September 06, 2018, and will apply to upland cotton purchased not later than December 04, 2018, and entered into the U.S. not later than March 04, 2019. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2018 through June 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 firm. Trading of CCC-loan equities was inactive.

The crop advanced in Alabama, Florida, and Georgia under seasonably warm conditions. Sunny to partly cloudy conditions prevailed throughout the period with daytime high temperatures in the high 80s to low 90s and overnight lows in the low to mid-70s.

Afternoon pop-up shower activity brought moisture to some areas along the Gulf and Atlantic coasts. Localized areas of south Alabama, south Georgia, and the Florida panhandle received around 1 to 2 inches of weekly accumulated rainfall, but most areas missed significant rainfall during the period.

Dryland fields benefited from the moisture in areas that received precipitation. However, abnormally dry conditions persisted in northwest Alabama and some pockets of central Georgia that missed significant precipitation in recent weeks. Dry conditions have begun to stress crops in these areas, and a soaking rainfall is needed to invigorate plants.

In Georgia, whitefly populations had increased in some fields, but not to treatable levels. Bolls were cracking open in the most mature fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 27, boll-setting neared completion and cotton bolls opening had reached 28 percent in Alabama and 14 percent in Georgia.

The crop made good progress under clear skies and mostly sunny conditions, which prevailed across the Carolinas and Virginia throughout the period. Seasonably warm daytime high temperatures were in the mid-80s to low 90s, and nighttime lows were in the low 60s to low 70s.

Areolate mildew was present in some fields in eastern South Carolina where wet conditions persisted. Reports indicated that the mildew may have spread into some counties in eastern North Carolina. Conversely, fruit shedding was reported in some fields in central South Carolina where abnormally dry conditions have stressed crops. Insect pressure was light and easily controlled. Producers scouted fields and applied treatments where populations met threshold limits.

Bolls had begun to crack open on the lower portion of plants. According to the NASS Crop Progress report release August 27, bolls opening had reached 15 percent in Virginia and 7 percent in the Carolinas.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41 and better, leaf 4 and better, and staple 34 and longer for third quarter 2018 and first quarter 2019 delivery. No sales were reported. Demand for open-end and ring-spun yarn was moderate. Most mills operated five to seven days.

Demand through export channels was moderate. Representatives for mills in China and Korea inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 and 37. Agents for mills in Pakistan and Taiwan inquired for any discounted styles of short staple cotton. 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 firm. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Hot and humid weather prevailed throughout the region. Daytime high temperatures were in the upper 90s, with the heat index at or above 102 for several days. Overnight lows were in the upper 70s. Pop-up thunderstorms brought mostly trace amounts of precipitation, which provided little relief from the scorching temperatures.

Crop protection measures have been terminated on most acreage. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 27, the crop condition in Arkansas was rated 98 percent fair-to-excellent, 90 in Missouri, and 98 percent in Tennessee. NASS also reported that open bolls were at 33 percent in Arkansas, 46 in Missouri, and 23 percent in Tennessee.

Defoliation was underway in several areas of the region. Harvesting was expected to commence within two weeks. Producers were preparing equipment for harvest and fall fieldwork.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were firm. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Fair weather conditions allowed the crop to make normal progress during the week in most areas. Daytime high temperatures were in the mid-90s. Overnight lows were in the low 70s. Pop-up thunderstorms brought 1 to 2 inches of rain to widely scattered areas, which should benefit late-planted fields in Mississippi.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 27, the crop condition in Louisiana was rated at 97 percent fair-to-excellent and 93 percent in Mississippi. NASS also reported that open bolls had reached 36 percent in Mississippi and 67 percent in Louisiana; defoliation was underway and harvesting was expected to kick-off within a week to ten days in several areas.

Producers were preparing equipment for harvest and fall fieldwork.

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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 slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. Interest was best from Indonesia, Taiwan, and Vietnam

Harvesting neared the end with the September 1 deadline for stalk destruction approaching in the Rio Grande Valley, according to the Pest Cast newsletter released on August 24. Yields varied greatly with producers reporting 650 to 1,500 pounds of cotton per acre from irrigated fields, and 350 to 500 pounds of cotton per acre from dryland fields.

Producers continued harvesting efforts to get all of the cotton off of the stalk. Defoliant applications and harvesting expanded in northern and central Texas. Gin openings increased for the season. Sample receipts increased at the Corpus Christi Classing Office.

According to the National Agriculture Statistics Service’s (NASS) Crop Progress report released on August 27, setting bolls was 88 percent, ahead of 53 percent last season, and boll opening was at 8 percent in Kansas. Cotton boll setting had reached 86 percent, compared to 72 percent last year, and boll opening was 9 percent in Oklahoma, according to NASS.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was very light. 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 Indonesia, Taiwan, and Vietnam.

A series of timely thunderstorms throughout the reporting period brought beneficial rainfall and occasionally cooler conditions that gave heat-stressed plants a reprieve. Daytime temperature highs were in the mid-90s to 100 degrees. Overnight temperatures were in the low to mid-70s.

Conditions were outstanding for advancing August cotton plants if rainfall was received. Heavy boll loads were reported. Final irrigation water was applied to some fields. Insect populations were generally low.

Additional heat units pushed the crop towards maturity, and the plants have passed vulnerability to insect damage, according to local experts. Monitoring continued, especially for aphids.

Trading

East Texas

  • In Oklahoma, a light volume of 2017-crop cotton mostly color 22 and better, leaf 3 and better, staple 37 and longer, mike 35-43, strength 29-31, uniformity 79-82, and 25 percent extraneous matter sold for around 75.50 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a light volume of 2017-crop cotton mostly color 44 and better, leaf 7 and better, staple 35 and longer, mike 34-41, strength 26-28, uniformity 79-80, and 100 percent extraneous matter sold for around 58.50 cents, same terms as above.

West Texas

  • A mixed-lot containing a heavy volume of 2017-crop cotton mostly color 33 and better, leaf 3 and better, staple 31-37, mike 24-47, strength 22-32, uniformity 75-81, and 25 percent extraneous matter sold for around 58.75 cents per pound, FOB car/truck (compression charges not paid).

Western Markets Regional Summary

Desert Southwest (DSW)

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

Temperatures were in the mid-100s in Arizona. Monsoon activity was active with approximately three-quarters of an inch of precipitation received early in the period. Harvesting expanded in Yuma. Local sources reported some fields averaged yields of 3 to 4 bales per acre. Initial ginning began.

The Visalia Classing Office received the first 2018-crop samples late in the period. Bolls were cracking open in central Arizona. Some treatments for lygus were made. Gin repairs were on-going. Daytime high temperatures were in the high 90s to low 100s in New Mexico and El Paso, TX.

The crop made good progress. Bolls are cracking open. Producers inspected and prepared equipment for harvest. No significant insect pressure were reported.

San Joaquin Valley (SJV)

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

Daytime high temperatures were in the high 90s to low 100s. The crop made good progress. Fields were approaching cut-out. Producers monitored for late-season pests. Gin repairs continued. Producers prepared equipment for harvest.

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.

Temperatures were in the high 90s to mid-100s in the Far West. Precipitation was received in Arizona. Monsoon activity brought strong winds and heavy rainfall. Approximately three-quarters of an inch of moisture was received. Harvesting expanded in Yuma, AZ. Bottom bolls were cracking open throughout the region.

Boll-setting advanced. Producers monitored for late-season pests and prepared equipment for harvest. Industry representatives and producers attended the Supima annual meeting.

Trading

Desert Southwest

  • A light volume mixed quality lot of 2017-crop cotton containing color 33 and better, leaf 3 and better, staple 31-37, mike 24-47, strength averaging 27.8, uniformity averaging 78.8, and 25 percent extraneous matter sold for around 58.75 cents per pound, FOB car/truck (compression charges not paid).

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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