Weekly Cotton Market Review

Irrigation polypipe in cotton. ©Debra L Ferguson Stock Photography

Spot quotations averaged 86 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, and uniformity 81.0-81.9) in the seven designated markets averaged 78.33 cents per pound for the week ending Thursday, September 6, 2018.  

The weekly average was down from 79.19 last week, but up from 72.63 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 79.07 cents Tuesday, September 4 to a low of 77.67 cents Thursday, September 6. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 6 totaled 645 bales. This compares to 2,719 reported last week and 8,136 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 11,911 bales compared to 24,795 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 81.38 cents, compared to 82.42 cents last week.

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.

Tropical storm Gordon made landfall near the Alabama-Mississippi border late Tuesday with sustained winds of 70 mph before weakening to a tropical depression early Wednesday morning. The storm brought up to 8 inches of heavy rainfall to portions of coastal Alabama and the Florida panhandle and triggered flash flooding in low-lying areas.

The National Weather Service issued tornado warnings in south Alabama and the Florida panhandle and states of emergency were declared as coastal areas were battered with strong winds, heavy rainfall and storm surge. The heavy wind whipped around older, taller plants and laid some plants down in fields directly in the storm’s path. Reports indicated younger cotton fields were mostly unaffected.

Bolls were cracking open in the earliest-planted fields and a period of sunny weather is needed to bleach out lint and invigorate plants that were blown over. More recently, wet weather patterns over Alabama and areas of south Georgia created ideal conditions for the spread of target spot and areolate mildew during the month of August. Damaging outbreaks of these diseases can lead to significant yield losses in affected fields. Boll rot has also been reported in areas where wet conditions have persisted.

Cotton fields were rapidly maturing and defoliation could begin in the earliest-planted fields in the next 10 days. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 4, cotton bolls opening had reached 41 percent in Alabama and 26 percent in Georgia.

The crop advanced in the upper Southeastern region as mostly fair to cloudy conditions dominated the weather pattern. Daytime high temperatures were in the low to mid-90s. Precipitation for the week was limited, afternoon pop-up showers brought light rainfall to portions of central and eastern North Carolina and Virginia during the period. Plant growth regulators were applied to rapidly maturing fields. Producers scouted fields and treated infestations of bollworms; treatments for stink bugs were winding down. In some coastal counties, soybean loopers were present in higher numbers that met threshold limits. Local experts reported areolate mildew was confirmed on samples collected from Halifax County, NC. According to the NASS Crop Progress report released September 4, bolls opening had reached 25 percent in North Carolina and Virginia and 16 percent in South Carolina.

Textile Mill

Buyers for domestic mills 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 throughout the Far East inquired 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 lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Hot and mostly dry weather prevailed during the week throughout the region. Daytime high temperatures were in the upper 90s, with the heat index at or above 100 degrees for several days. Overnight lows were in the upper 70s. Light and scattered thunderstorms brought less than one-half of an inch of precipitation to the region; however, more shower activity was predicted for the days ahead in the aftermath of Tropical Storm Gordon.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 4, the crop condition in Arkansas was rated 97 percent fair-to-excellent, 90 in Missouri, and 99 percent in Tennessee. NASS also reported that open bolls had reached 53 percent in Arkansas and 52 percent in Missouri and Tennessee. Local experts reported that the crop is at least two weeks ahead of last year’s pace. Defoliation was gaining momentum. Harvesting had commenced on a limited basis. Fall fieldwork was underway in many areas. Insect pressure in late-planted fields was light and easily controlled.

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.

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. Light and scattered thunderstorms brought less than one-quarter of an inch of moisture to the region early in the week; however, shower activity in the aftermath of Tropical Storm Gordon delayed outdoor activities in parts of Mississippi, with up to 2 inches reported in places directly in the path of the storm. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 4, the crop condition in Louisiana was rated at 97 percent fair-to-excellent and 95 percent in Mississippi. NASS also reported that open bolls was at 55 percent in Mississippi and 79 percent in Louisiana. Defoliation was widespread and harvesting was underway. No yield data was immediately available.

Trading

North Delta .. A light volume of old-crop cotton, color mostly 42 and better, leaf 5 and better, staple 36 and longer, mike averaging 43.4, strength averaging 30.3, and uniformity averaging 81.8 traded for around 80.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

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 lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light to moderate. Interest was best from Korea, Pakistan, and Taiwan.  

Harvest was in full-swing in the Blackland Prairies (BP). Yields were reported mostly at one-half bale to one bale per acre in the northern BP. Harvesting was interrupted in Ellis County and surrounding areas due to recent rainfall that left fields soggy. Some fieldwork was delayed three days. Gins processed the backlog of modules that had accumulated on the yards, regardless of the rainy weather conditions.

Harvesting drew to a close in the Rio Grande Valley. Modules were abundant on gin yards and pressing services continued non-stop, in spite of localized rain activity. Harvesting and ginning continued around shower activity in south Texas. In Kansas, the crop made good progress and some bolls had begun to crack open. Timely rainfall helped advance the stands. In Oklahoma, recent rainfall helped the late-planted stands that were at full bloom. Some fields were at cut-out. Producers hoped for a warm September to help finish the crop.

West Texas

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

Daytime temperature highs were in the low 80s to upper-90s, and overnight lows dropped into the mid-60s. The heat units from the mid-90s temperatures early in the reporting period helped bolls to open. Spotty and sometimes heavy rainfall was experienced that brought as much as 3 inches of precipitation to isolated areas. The crop advanced and square retention was high. Most fields were at cut-out and some bolls popped open in dryland and irrigated fields. Experts reported pockets of verticillium wilt and bacterial blight disease. Monitoring for stink bugs and bollworms continued. Lots of beneficial insects have helped keep pressure low.

Trading

East Texas .. In Texas, a light volume of color 21, leaf 3, staple 39, mike 41-48, strength 29-32, and uniformity averaging 82.3 sold for around 80.00 cents per pound, FOB warehouse (compression charges not paid). .. A light volume of mostly color 41 and better, leaf 4 and better, staple 34, mike 38-45, strength 27-30, and uniformity 77-79 sold for around 75.75 cents, same terms as above.

West Texas .. A mixed-lot containing a light volume of 2017-crop cotton mostly color 21 and 31, leaf 3 and better, staple 36 and longer, mike 35-47, strength 24-32, uniformity 76-83, and 100 percent extraneous matter sold for around 73.50 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 lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the low 100s in Arizona. Scattered showers produced around one-quarter of an inch of moisture in central Arizona and in higher elevations around Safford, AZ. Further east, some locales received over 2 inches of rainfall. Producers were concerned with the cooler morning temperatures and shorter daylight hours. Water availability and deliveries were concerns for the 2019 Arizona row crops. Grading of Yuma cotton samples began in the Visalia Classing Office.

Initial grading results were typical of the area. Daytime high temperatures were in the low 90s in New Mexico and El Paso, TX. In New Mexico, sources reported some fields appeared to be about two weeks behind in development. Local sources reported that the crop made good progress in El Paso and Hudspeth County. Boll loads were good and some bolls are cracking open. Some producers initiated final irrigation schedules in the DSW. Producers inspected and prepared equipment for harvest.

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. Foreign mill inquiries were light.

Daytime high temperatures were in the high 90s to low 100s. Blooming was visible on tops of plants. Bottom bolls were cracking open. Overall, the crop made good progress. 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 90s to low 100s in the Far West. Overall, the crop made excellent progress in the region. Boll loads were good. No significant insect pressures were reported, but producers continued to monitor the crop for late season pests. Some Desert Southwest producers finished up irrigation schedules.


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