Weekly Cotton Market Review – USDA

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Spot quotations averaged 42 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 73.55 cents per pound for the week ending Thursday, November 29, 2018.

The weekly average was up from 73.13 last week and 70.15 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 72.51 cents Friday, November 23 to a high of 74.17 cents Wednesday, November 28. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 29 totaled 37,633 bales. This compares to 11,738 reported last week and 98,660 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 105,611 bales compared to 434,925 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 78.68 cents, compared to 78.78 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #6 FOR UPLAND COTTON November 29, 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 December 6, 2018, allowing importation of 12,334,220 kilograms (56,650 bales) of upland cotton.

Quota number 6 will be established as of December 6, 2018, and will apply to upland cotton purchased not later than March 5, 2019, and entered into the U.S. not later than June 3, 2019. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period July 2018 through September 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 were moderate. Demand was moderate. Producer offerings were light. Average local spot prices were firm. Trading of CCC-loan equities was inactive.

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Harvesting advanced slowly across the lower Southeastern region as wet conditions continued to delay fieldwork. Thunderstorms brought moderate rainfall to portions of south Alabama, the Florida Panhandle, and areas of south Georgia entering the period. Daily accumulated rainfall totals measured from 1 to 2 inches over the weekend with lesser accumulations observed further inland.

Early morning fog also delayed fieldwork in some areas. Daytime high temperatures were in the mid-50s to mid-60s over the weekend, but a cold front entered the region mid-week and temperatures plummeted into the high 40s to low 50s. In many areas, soils remained saturated and fields were too soft to support equipment. Pickers bogged down and fieldwork was slowed until soils were dried out and firmed.

Harvesting remained several weeks behind. Yield and lint quality continued to decline due to continued wet weather. Ginning had slowed and sample receipts at the Macon Classing Office had declined. Clear and sunny conditions late week helped soils to firm and harvest activity to resume.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 26, cotton harvested reached 78 percent in Alabama and 72 percent in Georgia.

Similar conditions were observed across the upper Southeastern region during the period. Thunderstorms brought around one-quarter to one inch of precipitation to areas across the Carolinas and Virginia. Fieldwork was delayed due to the wet conditions and harvesting slowed. Lint quality and yield was declining in some areas where cotton bolls have remained open for weeks and exposed to wet conditions.

Clear and dry conditions late week allowed producers to re-enter fields and resume harvesting ahead of wet weather forecast in the near term. According to NASS, cotton harvested reached 89 percent in Virginia, 81 in North Carolina, and 65 percent in South Carolina.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 31, leaf 4, and staple 35 and longer for January through October 2019 delivery. Mill buyers also inquired for a moderate volume of color 41, leaf 4, and staple 36 and longer for first quarter through fourth quarter 2019 delivery. No additional 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 Bangladesh inquired for a moderate volume of color 21, leaf 3, and staple 35 and longer for nearby shipment. Agents for mills in Pakistan inquired for a moderate volume of color 42, leaf 4, and staple 36 for nearby shipment. No sales were reported.

Trading

  • A heavy volume of mixed lots containing color mostly 21-41, leaf 2-4, staple 35 and longer, mike 35-49, strength 28-31, and uniformity 79-82 sold for around 275 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

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.

Harvesting was completed in Missouri and advanced slowly elsewhere in the North Delta during the period. Overcast and cloudy conditions dominated the weather pattern over the weekend and early in the week. Daytime high temperatures plunged into the upper 30s to low 40s as a cold front entered the region early week. Widespread rainfall brought around one-quarter to one-half of an inch of moisture to most areas, with locally heavier accumulations observed in some locales.

Sunny and warmer conditions returned mid-week, but in most areas fields remained too saturated to support equipment. In areas that were accessible, producers attempted to harvest the last remaining fields ahead of wet weather forecast in the near term. Some gins had completed operations for the season or gone to gin days as the last modules arrive from fields.

Larger gins continued pressing operations. According to the National Agricultural Statistics Service’s Crop Progress report released November 26, harvesting had reached 98 percent in Arkansas and 92 percent in Tennessee.

South Delta

Spot cotton trading was slow. 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.

Harvesting advanced at a slow pace during the week. Overcast weather was observed over the weekend and scattered showers brought around one-quarter to one inch of precipitation to most areas. A cold front entered the region early in the week bringing clear conditions and pushing daytime high temperatures down into the low 50s to low 60s. Wet weather returned late in the week and producers attempted to complete fieldwork in between rain events.

However, conditions remained too wet in most areas and a period of sunny and dry weather is needed to allow soils to firm. A small percentage of the crop remains to be harvested. Ginning was winding down. According to the National Agricultural Statistics Service’s Crop Progress report released November 26, harvesting had reached 99 percent in Louisiana and 94 percent in Mississippi.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • A light volume even-running lot containing color 21 and 31, leaf 3, staple 36, mike 43-49, strength 31-33, and uniformity 80-82 sold for around 64.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was moderate. 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 Pakistan, Vietnam, and Turkey.

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In the northern Blackland Prairies, harvesting was underway in soft, muddy fields. Producers were eager to harvest ahead of additional rainfall in the nearby forecast. Ginning continued uninterrupted. Modules were transported from the fields to the gin yards. Yields reported by local producers were one and one-half to three bales per acre. All fields are dryland. Harvesting and ginning continued in the Winter Garden area under clear conditions.

In Kansas, producers were encouraged with yields at two and one-half to three bales per acre from dryland fields. Irrigated fields produced around 3 bales per acre, but harvesting has been slow because the plants were not readily dropping foliage after defoliants were applied. Ginning was processing more smoothly compared to last season, giving the expectation for fewer gin fires and higher quality fiber.

In Oklahoma, harvesting made good progress at 71 percent completed, compared to 51 the previous week and 67 for the five-year average, according to the National Agricultural Statistics Service’s Crop Progress report published on November 26.

West Texas

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

Harvesting is finally moving at a good pace under low humidity and drier conditions, according to local sources. The wind helped dry out soggy fields so that harvesting could resume, but caused problems when dumping harvested cotton into the module builders.

Some wind gusts were reported at 30 to 50 miles per hour. Daytime temperature highs were in the low 50s to mid-70s, and nighttime lows were in the 20s to mid-40s. According to the National Agricultural Statistics Service’s Crop Progress report released on November 26, harvesting was 60 percent completed for the state, compared to 47 last week and 65 for the five-year average.

Trading

East Texas

  • In Texas, a mixed lot containing a moderate volume of mostly color 42 and better, leaf 4 and better, staple 37 and 39, mike 42-47, strength 29-33, and uniformity 81-82 sold for around 73.50 cents per pound, FOB warehouse (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 32 and 42, leaf 4 and better, staple 32 and longer, mike 36-42, strength 25-27, and uniformity 77-80 sold for around 59.00 cents, same terms as above.
  • In Oklahoma, a light volume of mostly color 31, leaf 3 and 4, staple 38, mike 42-45, strength 29-30, and uniformity 79-81 sold for around 76.00 cents, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 31 and 41, leaf 3 and 4, staple 36 and 37, mike 39-41, strength 29-31, and uniformity 79-81 sold for around 75.00 cents, same terms as above.

West Texas

  • A light volume of mostly color 21 and 31, leaf 2 and 3, staple 38 and longer, mike 36-48, strength 30-34, and uniformity 80-82 sold for around 77.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 31 and 41, leaf 4 and better, staple 35-36, mike averaging 41.3, strength 28-29, and uniformity 81-82 sold for around 72.75 cents, same terms as above.
  • A light volume of mostly color 31, leaf 3 and 4, staple 35-38, mike 37-44, strength 29-34, and uniformity 79-82 sold for around 72.00 cents, same terms as above.
  • A heavy volume of mostly color 31 and 41, leaf 5 and better, staple 35-37, mike 39-48, strength 28-32, and uniformity 79-82 sold for around 71.25 cents, same terms as above.
  • A moderate volume of CCC-loan equities traded for 19.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was active. Supplies and demand were moderate. Average local prices were firm. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light-to-moderate. Interest was best from Pakistan, Turkey, and Vietnam.

Harvesting continued late into the night in central Arizona under clear, dry conditions for most of the reporting period. Daytime temperature highs were in the mid-70s with overnight temperature lows in the 40s and 50s.

Harvesting was completed in Yuma and Safford, AZ. Harvesting was about 65 percent completed in central Arizona. Some gins had not opened and some were operating one shift. A few gins were shut down for repairs. Modules were in the fields and being transported to the gin yards.

Harvesting in El Paso, TX reached 90 percent completed, but was not as far along in New Mexico. Yields were mixed from 1 to 3 bales per acre, according to local sources.

San Joaquin Valley (SJV)

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

Final harvest was underway ahead of a cold front on November 28 that brought varying amounts of much needed rainfall. Rain and snow were received in higher elevations. Local sources estimated that 98 percent of the fields were harvested. All of the cotton was off of the stalks and in modules around Tulare. Most harvesting was for second pick. An excessive amount of modules remained in the fields and could take up to two weeks to transport to the gin yards.

American Pima (AP)

Spot cotton trading was slow. Supplies and demand were moderate. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best from India, Pakistan, and Vietnam.

Harvesting neared completion in the San Joaquin Valley and in most of the Desert Southwest. A few isolated areas were not as far along around Hatch, NM and east of El Paso, TX. Ginning continued uninterrupted. A cold front moved into the Far West on November 28, and brought varying amounts of rainfall to a widespread area. Yields were reported at one and three-fourths to almost four bales per acre in portions of New Mexico and El Paso, TX, according to local sources.

Trading

Desert Southwest

  • Mixed lots containing a light volume of mostly color 31 and better, leaf 3 and better, staple 36 and longer, mike 43-52, strength 31-33, and uniformity 80-82 sold for 76.75 to 77.50 cents per pound, uncompressed FOB warehouse.
  • Mixed lots containing a moderate volume of mostly color 41, leaf 4 and better, staple 36 and longer, mike 43-49, strength 30-32, and uniformity averaging 81.00 sold for around 74.00 cents, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A light volume of color 2, leaf 2, staple 46, mike averaging 4.1, strength averaging 43.6, and uniformity averaging 85.2 sold for around 121.00 cents per pound, uncompressed FOB warehouse.

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