Weekly Cotton Market Review – USDA

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Average quotations were 32 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 61.55 cents per pound for the week ending Thursday, May 23, 2019.

The weekly average was up from 61.23 last week, but down from 82.94 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 60.45 cents Friday, May 17 to a high of 62.37 cents Monday, May 20.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 23 totaled 12,871 bales. This compares to 1,905 reported last week and 34,977 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,177,101 bales compared to 1,981,127 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 67.48 cents, compared to 66.80 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were firm. Trading of CCC-loan equities was inactive.

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Mostly sunny to partly cloudy conditions dominated the weather pattern across Alabama, the Florida Panhandle, and Georgia during the week. Daytime high temperatures varied from the low 80s to low 90s, with overnight lows in the mid-60s to low 70s.

Very light isolated precipitation was received in portions of east-central Alabama and areas of Georgia early in the period. Rainfall totals measured from trace amounts to less than one-tenth of an inch.

Planting advanced across the lower Southeast region without interruption. In north Alabama, cool nights and reduced seedling vigor has made young plants susceptible to increased pressure from thrips. Local area experts were forecasting heavy thrips pressure in Cherokee County and the Tennessee Valley from mid-to-late May and encouraged producers to continue scouting fields.

In Georgia, producers reported good stands on emerging seedlings. Local experts expressed concern on dryland acreage as seed is dusted into fields; hot temperatures and lack of rainfall in the near term forecast will continue to wick away subsoil moisture. Producers would welcome a timely rainfall in the next week or two to invigorate seedlings and enhance germination.

According to the National Agricultural Statistic Service’s (NASS) Crop Progress report released May 20, cotton planted was ahead of the five-year average in Alabama at 72 percent and also in Georgia at 61 percent planted.

Mostly sunny to cloudy conditions were observed across the Carolinas and Virginia during the period. Daytime high temperatures varied from the mid-80s to low 90s, with nighttime lows in the low 60s to low 70s. Very light isolated shower activity brought moisture to some areas of eastern North Carolina and Virginia, but accumulations were less than one-tenth of an inch.

Planting activity made good progress across the upper Southeastern region, but had slowed in some areas due to lack of moisture. Abnormally dry conditions expanded along coastal North Carolina and moderate drought conditions persisted along most of coastal South Carolina, according to the U.S. Drought Monitor.

Producers expressed concern about seedling emergence in the weeks ahead, unless a timely rainfall is received. According to NASS, in South Carolina cotton planted reached 65 percent, Virginia 56, and in North Carolina 52 percent.

Textile Mill

Domestic mill buyers inquired for a heavy volume of 2019 and 2020-crop cotton, color 41, leaf 4, and staple 34 and longer for November 2019 through second quarter 2021 delivery. No sales were reported. No additional inquiries or purchases were reported; reports indicated most mills have covered their raw cotton needs through the fourth quarter 2019.

Demand through export channels was moderate, but had increased as ICE futures trended lower. Pakistani and Indonesian mill buyers purchased moderate volume mixed recaps containing color 31 and 41, leaf 4, and staple 34 and longer for nearby shipment.

Trading

  • No trading activity was reported.

South Central Markets Regional Summary

North Delta

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

Short, but intense rain showers brought more unwanted precipitation to the region early in the period. Unsettled weather, characterized by gusty winds and scattered showers, are in the short term forecast. High wind warnings were issued by the National Weather Service for some northern areas. Daytime temperatures were in the 80s and 90s. Overnight lows were in the 60s.

Field activities were hampered due to saturated soils in some unplanted fields; producers have also been struggling to control weeds in planted fields that are too soft to support equipment. According to the National Agricultural Statistics Service’s Crop Progress report released May 20, planting had reached 50 percent in Arkansas, 34 in Missouri, and 50 percent in Tennessee.

Although steady progress was made this week, these figures remained well behind the five-year average. Local experts reported that some fields in Arkansas and Missouri will not be planted before the insurance deadline; producers who have prevented planting crop insurance will receive some compensation and therefore not suffer a complete loss this season.

South Delta

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

Persistent storm systems during the week brought more rain showers, thunderstorms, and strong winds to the region. Daytime temperatures were in the 70s and 80s.

Overnight lows were in the 50s to 70s. According to the National Agricultural Statistics Service’s Crop Progress report released May 20, planting had reached 66 percent in Louisiana and 34 in Mississippi. Although steady progress was made this week, these figures remained well behind the five-year average.

Producers have also had to contend with weed problems related to wet soil conditions. Local experts reported that a few more fields in Louisiana and Mississippi will not be planted before the insurance deadline; producers have taken steps to mitigate their losses through prevented planting crop insurance.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • A moderate volume CCC-loan equity traded at around 4.00 cents per pound.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were firm. Producer interest in forward contracting was non-existent as ICE December futures continued its daily fluctuations.

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Trading of CCC-loan equities was inactive. Foreign mill inquiries were heavy. As ICE futures prices trended lower in the past two weeks; new sales were active according to the Foreign Agricultural Service export sales report. New-crop inquiries were moderate.

Interest was best from China, Pakistan, and Vietnam. Oklahoma and Kansas warehouse shipping activity was brisk. A warehouse was being built in Wichita, KS that will accommodate 150,000 bale capacity.

The cotton crop is getting just what it needs, plenty of sunshine and hot weather; although sources reported the Rio Grande Valley (RGV) could use some rain. The Upper Coast and Blackland Prairies need a break from constant showers, which has delayed planting and re-planting in these areas.

Flooding in the Brazos Bottoms and excessive moisture in the Upper Coast and Blackland Prairies made weed control a top priority. Windy conditions delayed spraying herbicides. The crop made good progress in the Coastal Bend, with the crop in various stages of development, due to re-planting. Local sources reported initial blooming around the Kingsville area. The crop advanced in the RGV.

Daily scattered showers, thunderstorms, and tornado activity stopped planting activities in some parts of Kansas and Oklahoma in the period. Cold and wet conditions were a concern for Kansas producers as little planting was accomplished in the previous week. Early plantings in Oklahoma were up to a stand.

West Texas

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was moderate. Producer interest in forward contracting was non-existent as ICE December futures continued its daily fluctuations. Average local spot prices were firm. Trading of CCC-loan equities was inactive.

Foreign mill inquiries were heavy. As ICE futures prices trended lower in the past two weeks; new sales were active according to the Foreign Agricultural Service export sales report. Interest was best from Bangladesh, India, Thailand, and Taiwan.

Sources reported Brazil and Taiwan were interested in lower color quality styles. Mills in India inquired for color 52 and lower that are staple 37 and longer. Inquiries for 2019-crop cotton were moderate. Interest was best from China, Pakistan, Turkey, and Vietnam.

Scattered thunderstorms produced strong winds and heavy rainfall in the period. Standing water was sighted in a few fields south of Lubbock. Flooding fields were a concern in the Panhandle. Strong winds and undesirable soil temperatures delayed planting in the High Plains.

Prior to weather events, planting was active northwest and west of Lubbock. Fields in the Lamesa territory were prepped and ready for planting; although sources reported standing water in some fields. Producers waited for fields to dry. There is still plenty of time to plant as most deadlines were around mid-June.

Weed management was a concern, due to excessive moisture.

Trading

East Texas

  • In Texas, a light volume mixed lot of mostly color 31 and 41, leaf 4 and better, staple 35-38, mike averaging 39.8, strength averaging 30.2, and uniformity averaging 80.3 sold for around 57.75 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a moderate volume of color 21 and 31, leaf 2 and 3, staple 36 and 37, mike averaging 38.6, strength averaging 30.3, and uniformity averaging 80.8 sold for around 67.25 cents, FOB car/truck (compression charges not paid).
  • A light volume of CCC-loan equities sold for 4.00 cents.

West Texas

  • A heavy volume mixed lot of mostly color 41, leaf 6 and 7, staple 36-38, mike averaging 40.4, strength averaging 29.2, uniformity averaging 81.1, with 100 percent bark sold for around 53.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of CCC-loan equities sold for 4.00 cents.

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 mostly in the high 70s in Arizona. Some rain moved into the state as the Pacific cold front blew through. Northern Arizona received some snow. Windy conditions and cooler temperatures slowed crop progress in Arizona, New Mexico, and El Paso, TX.

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.

Temperatures were 15 to 20 degrees below average as a late spring cold front moved into California mid-week, keeping daytime high temperatures in the mid-to-high 60s. Scattered thunderstorms and hail damaged cotton and tomato plants in western Fresno and Kings Counties.

Local sources reported partial losses in fields; while other fields sustained more damage. Field assessments were on-going. Unsettled weather remained in the forecast. Crop progress was slowed due to unseasonably cool, wet conditions.

Bakersfield has received 1.41 inches total rainfall in May. Fresno received 1.79 inches of rain for the month. Rainfall totals were over average in many Valley communities. Snowfall accumulated at 6,000 feet and higher in the Sierra Nevada Mountains.

American Pima (AP)

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

Well below average temperatures were prevalent. Daytime high temperatures were in the 60s and 70s for the region, with the exception of El Paso, TX; temperatures were in the 80s. A late season cold front produced thunderstorms, strong winds, and hail in the San Joaquin Valley of California.

Hail damage was reported in cotton and tomato fields in western Fresno and Kings Counties. Local sources reported partial losses in fields; while other fields sustained more damage. Assessments continued to determine the number of acres affected.

Cotton-growing areas of Arizona received traces of rain. Snow accumulated in higher elevations of Arizona and California. Overall, crop progress was slowed due to unseasonably cool, wet conditions.

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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