Weekly Cotton Market Review – USDA

Spot quotations averaged 87 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 59.90 cents per pound for the week ending Thursday, June 27, 2019.

The weekly average was down from 60.77 last week and 81.98 cents reported the corresponding period a year ago. Daily average quotations ranged from a season low of 59.02 cents Friday, June 21 to a high of 60.61 cents Wednesday, June 26.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 27 totaled 21,086 bales. This compares to 21,189 reported last week and 5,747 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,252,055 bales compared to 2,045,626 bales the corresponding week a year ago. The ICE Oct settlement prices ended the week at 65.99 cents, compared to 65.50 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 lower. Trading of CCC-loan equities was inactive.

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A mix of mostly sunny to partly cloudy conditions dominated the weather pattern across the lower Southeastern region during the period. Seasonably hot daytime high temperatures were in the mid-to-low 90s. Afternoon showers brought light scattered precipitation to areas throughout Alabama and central Georgia over the weekend. Localized precipitation totals measured from trace amounts to around one-quarter of an inch of moisture.

Local experts reported that crop maturity varied in many fields due late-emerging cotton. Fields were side-dressed with nitrogen. Squaring was well underway across the region and many fields were blooming. Some producers began applications of plant growth regulators. Producers scouted fields for square retention and some fields were treated for plant bugs where retention was at threshold. In Georgia, pressure from aphids was building and some hot spots required treatment. Boll-setting was also reported in some of the earliest-planted fields.

According to the National Agricultural Statistic Service’s (NASS) Crop Progress report released June 24, cotton squaring advanced to 46 percent in Alabama and 43 percent in Georgia.

Similar weather conditions were observed across the upper Southeastern region during the period with seasonably hot daytime high temperatures in the mid-90s. In some areas, fieldwork was interrupted over the weekend as a storm system brought light to moderate precipitation to areas throughout South Carolina, portions of coastal North Carolina, and Virginia. Rainfall totals varied from trace amounts to around one inch of moisture.

The crop progressed well, but plant maturity varied in many fields due to late-emerging cotton. Pressure from aphids was prevalent and producers treated fields. Good square retention was reported and pressure from plant bugs was not heavy, but some infestations required treatments. Stink bugs were reported in some pre-bloom cotton fields and producers were advised to monitor populations once blooming gets underway, as small bolls were susceptible.

According to NASS, cotton squaring reached 42 percent in South Carolina, 36 in North Carolina, and 26 percent in Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2019-crop cotton, color 41, leaf 4, and staple 34 for fourth quarter 2019 through third quarter 2020. No sales or additional inquiries were reported. Most mills have their raw cotton needs covered through fourth quarter 2019.

Demand through export channels had tapered and was moderate. Agents throughout the Far East inquired for any recaps containing 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 and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Fairly typical summer weather characterized the climatic pattern during the period. Daytime temperatures were in the 80s and 90s; higher temperatures are in the forecast for the week ahead. Overnight lows were in the 70s. Pop-up thundershowers occurred throughout the region. Most areas received up to 1 inch of moisture, which benefited fields, and heavier amounts were recorded in a few places.

Rainfall in the Upper Mississippi River Valley prompted the National Weather Service to issue a flood warning for Memphis as the Mississippi River rose above flood stage once again. Low-lying fields continued to be plagued by encroaching water levels; however, pumping costs are low since demands for supplemental irrigation have been kept to a minimum.

Thrips were no longer a problem in most fields. Producers were scouting for plant bugs and other pests, including weeds. Fields were treated as necessary to protect the crop, which made good progress as squaring gained momentum. Early-planted fields were treated with plant growth regulators to control excessive vegetative growth; blooming was expected to begin within a week in early-planted fields.

South Delta

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

Typical summer conditions dominated the weather pattern during the period. Daytime temperatures were in the 80s and 90s, while overnight lows were in the 70s. Warmer temperatures are in the forecast for the week ahead. Scattered thundershowers brought more moisture throughout the region. Most areas received up to 1 inch of precipitation, which benefited fields. A few places received somewhat higher amounts. Persistent rainfall prompted the National Weather Service to issue a flood warning as the Boeuf River in Louisiana rose above flood stage once again.

Low-lying fields continued to be plagued by high water levels; however demands for supplemental irrigation have been minimized, what has in turn reduced the cost of pumping. Thrips were no longer a problem in most fields; producers turned their attention to plant bugs and other insect pests. Fields were treated as necessary to protect them from a variety of weed and insect pests.

The crop made good progress as squaring gained momentum; blooming was expected to begin within a week in early-planted fields. Plant growth regulators were applied to control excessive vegetative growth.

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 moderate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate. Foreign inquiries were moderate. Interest was best from China, Bangladesh, and Turkey.

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In the Rio Grande Valley, stands advanced with daytime high temperatures in the low to upper 90s, and overnight lows in the upper 70s to low 80s. A severe storm on June 24, brought 8 to 12 inches of rainfall and hail. Some fields remained flooded at the end of the reporting period. Insecticides were applied as needed ahead of the storm.

The Upper Coast and Coastal Bend received rainfall from the same storm that helped progress the crop and supplement irrigation water. Stands began to square in the Blackland Prairies. Some stands were a month behind normal, according to local sources. Scouting for fleahoppers and other plant pests were ongoing.

In Kansas, heat units increased with warmer daytime high temperatures in the low 80s to low 90s. Overnight temperature lows were in the low 50s to upper 60s. Earlier-planted stands began to square, but most fields were at the cotyledon stage, according to local reports. Producers were discouraged that weather conditions did not allow opportunities to plant as many acres as they had intended. Many of those acres were planted to soybeans. Wheat harvest is underway.

In Oklahoma, seedling stands slowly gained vigor as daytime high temperatures warmed into the low 90s to low 100s. Producers continued to monitor for plant bugs. Herbicides were applied to help control weeds.

West Texas

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

Heat units built and stands progressed with daytime high temperatures in the low 90s to low 100s. Overnight lows were in the mid-60s to mid-70s. Intermittent severe storms brought moisture to some areas, but overall the sunny, warmer conditions helped cotton advance. Some areas finalized planting, and some stands had recently emerged. Some fields in the Rolling Plains remained too wet to plant and were left unseeded.

Challenges continued with some stands lost to blowouts from high winds, hail storms, and seedling disease from excessive rainfall. Other areas on the High Plains were dry and needed rainfall. Producers continued to scout for insects and apply treatments as needed. Weeds were managed with herbicides.

Save The Date:

On behalf of Texas Tech University and the U.S. Department of Agriculture, please join us for the Cotton Classing Signing & Ceremonial Groundbreaking events on Monday, July 1, 2019 at the Texas Tech University Bayer Plant Science Building. The ceremony begins at 10:30am. Cotton attire … Jeans preferred

Trading

East Texas

  • In Oklahoma, a mixed lot containing a heavy volume of mostly color 23 and 33, leaf 2-5, staple 36 and longer, mike 27-34, strength 26-34, uniformity 77-82, and 25 percent extraneous matter sold for around 51.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Kansas, a heavy volume of mostly color 21 and 31, leaf 3 and 4, staple 35, mike 30-34, strength 27-32, uniformity 78-82, and 25 percent extraneous matter sold for around 55.50 cents, same terms as above.
  • A heavy volume of mostly color 23 and 33, leaf 2-5, staple 35 and longer, mike 27-34, strength 26-30, uniformity 77-82, and 25 percent extraneous matter sold for around 49.75 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 0.50 to 1.50 cents.

West Texas

  • A moderate volume of mostly color 31 and 41, leaf 3-5, staple 35 and longer, mike 35-45, strength 27-34, uniformity 78-83, and 25 percent extraneous matter sold for around 59.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a heavy volume of mostly color 31 and 41, leaf 3 and 4, staple 35 and 36, mike averaging 48.3, strength averaging 28.2, and uniformity averaging 82.0 sold for around 56.25 cents, same terms as above.
  • A heavy volume of color 33, leaf 3, staple 35, mike 35-49, strength 27-34, and uniformity 79-83 sold for around 55.25 cents, same terms as above. ..A heavy volume of CCC-loan equities traded for 0.75 to 1.00 cent.

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.

Daytime high temperatures were in the low 100s. Interestingly, heat units are 3 to 10 days behind normal as tracked and reported by the University of Arizona Cooperative Extension; probably due to the below-average spring temperatures. Blooming and boll setting progressed in Yuma. Plenty of sunshine allowed the crop to make good progress in central Arizona and Safford. Temperatures reached into the high 90s in New Mexico and El Paso, TX. The heat advanced the crop.

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.

Temperatures were mostly in the high 80s to 90s. Initial blooming began. Fieldwork was active as producers cultivated and check insect traps. Pressure from lygus and aphids increased throughout the SJV. Treatments were made to control the pests.

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. A few new sales were reported. Interest was best from Brazil, India, and Japan for 2018-crop cotton. Merchants concern continued as the China/US trade dispute remains unresolved. According to the Foreign Agricultural Service, sales for the next marketing year were at 58,200 bales compared to 201,100 bales a year ago.

Daytime high temperatures were mostly in the low 100s for the Far West. No rainfall was recorded in the period. The crop made excellent progress. Fieldwork was active as irrigations, herbicides, and insecticides were applied as needed. No significant insect issues were reported for the Far West crop.

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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