Weekly Cotton Market Review – USDA

Photo: Nick McMichen

Spot quotations averaged 65 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 78.98 cents per pound for the week ending Thursday, September 13, 2018.

The weekly average was up from 78.33 last week and from 69.95 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 80.22 cents Monday, September 10 to a low of 77.91 cents Thursday, September 13.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 13 totaled 216 bales. This compares to 645 reported last week and 2,403 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 12,127 bales compared to 27,198 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 81.62 cents, compared to 81.38 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #21 FOR UPLAND COTTON September 13, 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 September 20, 2018, allowing importation of 13,296,430 kilograms (61,069 bales) of upland cotton.

Quota number 21 will be established as of September 20, 2018, and will apply to upland cotton purchased not later than December 18, 2018, and entered into the U.S. not later than March 18, 2019. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2018 through July 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.

Fair to mostly cloudy conditions prevailed over the lower Southeast region during the period. Daytime high temperatures were in the mid-80s to low 90s with overnight lows in the low 70s.

Widespread thunderstorms brought moderate precipitation to areas throughout Alabama and the Florida panhandle. Weekly accumulated precipitation totals measured 1 to 3 inches, with locally heavier measurements recorded in some locales.

The crop progressed well. Producers continued fieldwork between rain events. Aerial sprays were applied in fields inaccessible to tractor sprayers. Light scattered precipitation was received throughout most of Georgia, with coastal areas receiving around 1 inch of weekly accumulated moisture.

Producers increased irrigation schedules as soil moisture conditions deteriorated. Defoliation should begin in the next week to 10 days in the earliest-planted fields. Whitefly pressure remained a concern in later planted cotton and producers scouted fields for infestations.

Producers along Atlantic coastal areas were cautiously eyeing the approach of Hurricane Florence, which made landfall late in the week. Georgia’s governor declared a state of emergency for all counties as Hurricane Florence approached the coast.

Mostly sunny to partly cloudy conditions prevailed over the Carolinas and Virginia during the period with variable daytime high temperatures in the upper 70s to lower 90s. Scattered rain showers and thunderstorms brought moisture to central and coastal areas of the upper Southeast region. Rainfall accumulations measured from 1 to 2 inches during the week, with isolated heavier downpours observed in some localized areas.

The crop made good progress. Very little cotton has been defoliated in the upper southeastern region. Fieldwork was suspended as producers eyed Hurricane Florence with great caution as it made landfall in the Carolinas.

States of emergency were declared in the Carolinas and Virginia in anticipation of Hurricane Florence and the Federal Emergency Management Agency announced that federal emergency aid is being made available to provide appropriate assistance for disaster relief efforts.

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 November through March 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported.

A series of storm cells brought unwelcome moisture and cooler temperatures throughout the region during the week. The remnants of Tropical Storm Gordon brought heavy rain storms to parts of Arkansas; local experts report as much as 3 inches in some areas.

This was followed by overcast skies and light showers from another weather system. Daytime high temperatures were in the upper 80s. Overnight lows were in the upper 50s in northern areas.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 11, the crop condition in Arkansas was rated 96 percent fair-to-excellent, 88 in Missouri and 96 percent in Tennessee. NASS also reported that open bolls had reached 74 percent in Arkansas, 66 in Missouri, and 68 percent in Tennessee. Local experts reported that the crop is at least two weeks ahead of last year’s pace. Defoliation and harvesting was delayed due to wet field conditions. No harvesting was reported.

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.

Wet, cool conditions prevailed during the week. Daytime high temperatures were in the low 90s. Overnight lows were in the upper 60s. Tropical Storm Gordon brought heavy rain storms to a widespread area in Mississippi; local experts report as much as 7 inches in some areas. All outdoor activities, particularly defoliation and harvesting, were at a standstill due to saturated soils and flooded roads.

Producers in Louisiana commenced harvesting cotton in areas not affected by precipitation. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 11, the crop condition in Louisiana was rated at 96 percent fair-to-excellent and 95 percent in Mississippi.

NASS also reported that open bolls were at 69 percent in Mississippi and 91 percent in Louisiana. Harvesting had reportedly reached 8 percent in Louisiana and 1 percent in Mississippi.

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Trading

North Delta

  • A light volume of old-crop cotton, color mostly 51 and better, leaf 5 and better, staple 36 and longer, mike averaging 45.0, strength averaging 30.2, and uniformity averaging 82.2 traded for around 70.00 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 inactive. 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 light to moderate. Interest was best from China, Turkey, and Vietnam.

Torrential thunderstorms delayed harvesting activities throughout the reporting period in the Upper Coast and in the Rio Grande Valley (RGV). Modules were unable to be transported out of soggy fields. Ginning continued uninterrupted. Some producers requested extensions to finish harvesting activities following the stalk destruction deadlines that have passed in the RGV.

Fields in the Edwards Plateau and northern Blackland Prairies received untimely heavy rainfall, which delayed harvesting. Modules had accumulated on gin yards and ginning continued uninterrupted. Producers were concerned with the detrimental effects of rain on the cotton remaining on the stalk.

Kansas cotton fields have big opened bolls on the top of the plants, and industry is encouraged. Dryland fields are expected to make around 1,000 pounds of lint per acre, according to experts. Late season rainfall helped to mature the bolls. Harvesting equipment was repaired and maintained as the industry moves toward the harvesting and ginning season.

Recent rains brought up to 4 inches of precipitation, which allowed wells to be turned off for the season. Hopes are that heat units build under warm temperatures in September to help the bolls fill in. Some treatments were applied for stink bugs.

West Texas

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

Isolated rain showers moved through the area and intermittently delayed fieldwork. Daytime temperature highs were in the mid-70s to mid-80s, with overnight lows were in the upper 50s to low 60s. Boll shed in areas lacking rain was reported. Some dryland fields were defoliated.

Producers consulted with industry experts to determine the best time to end irrigation. Spraying for bollworms continued to protect susceptible bolls, according to industry experts. High populations of beneficial insects have helped keep aphid pressure low.

Experts reported pockets of verticillium wilt and bacterial blight disease. Producers continued to keep weeds controlled under humid conditions.

Trading

East Texas

  • In Texas, a light volume of mostly color 21 and 31, leaf 3, staple 39 and longer, mike averaging 43.8, strength 27-33, and uniformity averaging 82.3 sold for around 80.00 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a mixed lot containing a light volume of 2017-crop cotton mostly color 33 and better, leaf 4 and better, staple 35 and longer, mike 28-43, strength 26-30, uniformity averaging 80.2, and 50 percent extraneous matter sold for around 59.00 cents, FOB car/truck (compression charges not paid).

West Texas

  • No trading activity was reported.

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.

Temperatures were in the mid-to-high 100s in Arizona, which advanced the crop. Harvesting and ginning continued in Yuma. Local sources reported lots of open cotton. According to the National Agricultural Statistics Service’s Crop Progress report released September 11, bolls opening reached 74 percent, which was near the five-year average. The condition of the crop was rated mostly fair-to-good.

Temperatures were mostly the 90s in New Mexico and El Paso, TX. No moisture was received in the period. Producers are hoping for a clear, open fall to finish the crop.

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.

Daytime high temperatures were in the high 90s to low 100s. Local sources reported that some fields were sprayed with the first shot of defoliant. According to the National Agricultural Statistics Service’s Crop Progress report released September 11, bolls opening reached 4 percent, compared to the five-year average of 39 percent. The condition of the crop was rated mostly good to excellent.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No domestic mill activity was reported. Foreign mill inquiries remained light. Interest was best for 2018-crop for October shipment. Merchants reported Egypt was aggressive in marketing new-crop cotton. Retailers remained concerned about Chinese tariffs.

Temperatures were in the 90s to100s in the Far West. The crop made good progress throughout the region. Industry experts were in general agreement with the yield projection of 1,610 pounds for California. The crop was in excellent condition.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A light volume of new-crop cotton color 2, leaf 2, and staple 46 and longer was contracted for around 135.00 cents per pound, UD free FOB warehouse.

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