Weekly Cotton Market Review – USDA

Cotton in no-till wheat stubble near Hereford, Texas. Photo: Larry Stalcup

Spot quotations averaged 205 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 58.45 cents per pound for the week ending Thursday, July 11, 2019.

This is the lowest weekly average since week ending April 7, 2016 when the average was 57.06. The weekly average was down from 60.50 last week and from 83.34 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 60.53 cents Friday, July 5 to a season low of 57.18 cents Thursday, July 11.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 11 totaled 1,262 bales. This compares to 8,371 reported last week and 8,353 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,261,688 bales compared to 2,056,439 bales the corresponding week a year ago. The ICE Oct settlement prices ended the week at 62.89 cents, compared to 66.55 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 sunny to overcast conditions prevailed across the lower Southeastern region during the period. Seasonably hot daytime high temperatures were in the upper 80s to upper 90s. Spotty afternoon pop-up thundershowers brought moderate precipitation to portions of central and south Alabama, the Florida Panhandle, and much of south Georgia during the period. Weekly accumulated precipitation totals measured from 1 to 3 inches in many areas, with lesser accumulations observed in other areas.

Producers welcomed the moisture, which relieved heat stressed crops and invigorated plants. However, many areas throughout Alabama missed significant precipitation and additional moisture is needed to relieve drought-stressed plants. Producers maintained full irrigation schedules. The crop progressed well and some of the earliest-planted fields were in the third week of bloom, according to local experts. Producers applied plant growth regulators and nitrogen to cotton fields.

Aphid populations were building in some areas. Producers scouted fields for multiple pests including plant bugs, spider mites, stink bugs, and bollworm escapes and applied treatments to infestations. According to the National Agricultural Statistic Service’s (NASS) Crop Progress report released July 8, cotton squaring advanced to 74 percent in Alabama and 71 percent in Georgia; boll-setting advanced to 25 percent in Georgia and 17 percent in Alabama.

Partly cloudy skies prevailed over the upper Southeastern region during the period. Seasonably warm daytime highs were in the upper 80s to mid-90s. Widespread afternoon and evening thundershowers brought precipitation to much of the central and eastern Carolinas and portions of Virginia throughout the week. Variable weekly accumulated rainfall totals measured from 1 to 4 inches throughout cotton growing areas.

The crop progressed well; fields were blooming and squaring, and boll-setting was getting underway. Producers scouted fields for multiple pests including plant bugs and stink bugs and applied treatments to areas that met threshold limits. According to NASS, cotton squaring reached 69 percent in North Carolina, 65 in South Carolina, and 58 percent in Virginia. Boll-setting reached 19 percent in North Carolina, 24 in South Carolina, and 1 percent in Virginia.

Textile Mill

Inquiries from domestic mill buyers were light. No sales were reported. Most mills have covered their raw cotton needs through the summer months. Demand for open-end and ring-spun yarn was moderate.

Demand through export channels was moderate. Agents for mills in Bangladesh purchased a moderate volume mixed lot recap containing color mostly 52, leaf 5 and better, and staple 34 and longer for nearby shipment. No additional sales were reported.

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.

A flow of hot, moist air from the Gulf of Mexico dominated the weather pattern during the reporting period. Heavy pop-up thundershowers occurred in isolated areas, which brought as much as 2 inches of precipitation; most places received less than 1 inch of rainfall. Daytime temperatures were in the 90s and the heat index soared into the 100s, which prompted the National Weather Service to issue a heat advisory for most of the Memphis territory. Overnight lows were in the 70s.

The crop made good progress as squaring advanced steadily; early-planted fields were blooming. Producers were advised that controlling plant bug populations before the canopy closed was essential to avoid any yield losses. Fields were treated as necessary to protect the crop and to control excessive vegetative growth.

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.

The weather pattern was characterized by a flow of hot, moist air from the Gulf of Mexico. Intense pop-up thundershowers occurred in isolated areas, which brought at least 2 inches of precipitation; most places received less than 1 inch of rainfall. Daytime temperatures were in the mid-90s and the heat index soared into the 110s, which prompted the National Weather Service to issue a heat advisory for widespread areas of Mississippi and Louisiana. Overnight lows were in the upper 70s.

The crop made good progress and early-planted fields were blooming. Producers were advised that controlling plant bug populations before the canopy closed was essential to avoid any yield losses due to this insect pest. Fields were treated to protect the crop and 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 inactive. Supplies and producer offerings were moderate. 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.

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In the Rio Grande Valley, fields began to dry following recent heavy precipitation. The rainfall was untimely as producers were preparing to defoliate the crop. Full bloom was underway in south Texas, and some stands reached cut-out. Producers applied plant growth regulators to promote good fruit development. Weeds continued to be a problem in the Coastal Bend, and solutions were limited.

Frequent downpours in the Blackland Prairies continued to interfere with fieldwork and weed control. Some low-lying parts of fields were underwater. A few stands had begun to bloom. Insect pressure was light in some areas, and heavy in others.

Kansas cotton stands progressed normally and had begun to square. Some stands were reported at 8 and 9-true leaves, according to local experts. Ginning continued.

In Oklahoma, stands progressed and responded well to hot, sunny conditions. Progress varied from 2-true leaves to squaring depending on the plant date.

West Texas

Spot cotton trading was inactive. Supplies and producer offerings were moderate. 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.

A general rainfall was received on July 6 and 7, which brought over 5 inches of rainfall to some areas. The rain was beneficial since the topsoil had been drying from blowing wind. The late crop continued to make good progress under hot, sunny conditions with daytime high temperatures in the mid-80s to upper 90s, and overnight lows in the mid-60s to mid-70s.

Irrigation water was applied if needed. Optimism built as the dryland crop advanced. Producers were busy monitoring for plant pests, and managing weed flushes. Applications were applied for fleahoppers and aphids. Meetings were attended.

Trading

East Texas

  • In Kansas, a light volume of color 53 and better, leaf 5-8, staple 35 and longer, mike 36-40, strength 26-29, uniformity 78-82, and 100 percent extraneous matter sold for around 41.00 cents per pound, same terms as above.
  • A light volume of color 52 and 53, leaf 8, staple 37 and 38, mike averaging 38.1, strength averaging 27.7, uniformity averaging 80.8, and 100 percent extraneous matter sold for around 30.00 cents, FOB car/truck (compression charges not paid).
  • In Oklahoma, a light volume of 53 and better, leaf 4 and better, mike 43-48, strength 26-30, uniformity 79-81 and 25 percent extraneous matter (bark) sold for around 52.00 cents, same terms as above.
  • A light volume of color 54 and better, leaf 6 and better, staple 33-36, mike 38-46, strength 26-29, uniformity 78-82, and 100 percent extraneous matter sold for around 41.00 cents, same terms as above.

West Texas

  • A light volume of mostly color 31 and better, leaf 3 and better, staple 35 and longer, mike 29-52, strength 28-34, uniformity 77-83 sold for around 61.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 43 and better, leaf 5-8, staple 35 and 36, mike 26-41, strength 24-29, uniformity 80-82, and 100 percent extraneous matter sold for around 42.00 cents, same terms as above.

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.

The triple-digit heat continued, with temperatures in the high 100s to low 110s in Arizona. Excessive heat warnings were in effect through the evening of Saturday, July 13. No rainfall was recorded in the period. Crop progress was good throughout the state. Blooming and boll development advanced. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report for week ending July 7, the condition of the crop was rated mostly fair to good.

Partly cloudy conditions, with a weak attempt of monsoon development brought very little moisture to New Mexico and El Paso, TX. Local experts reported crop progress was mixed in both areas. Hail damage in the spring affected development around Hatch, NM. Sources estimated around 40 to 50 percent of stands were struggling and were about 3 to 4 weeks behind schedule.

The crop in El Paso County looked good and appeared to be on time. In Hudspeth County, the crop looked rough, due to limited irrigation water.

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 90s. Local sources reported the crop as a mixed bag. Blooming continued. Increased insect activity, especially lygus, somewhat mild temperatures, and the general lateness of the crop focused concern on yield potential.

According to the National Agricultural Statistics Service’s Crop Progress report for week ending July 7, the condition of the crop was rated 100 percent fair. This rating in itself is unusual for the Valley and is a reflection of the cool, wet spring time planting conditions. The California State Department of Agriculture. Pink Bollworm program had mapped approximately 245,250 acres of cotton in the SJV as of June 28.

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.

Daytime high temperatures were mostly in the 90s and 100s for the Far West (FW). The crop made good progress as blooming and boll development advanced. Sources reported the FW crop needed more heat units and in general was 1 to 2 weeks late in development.

According to the National Agricultural Statistics Service’s Crop Progress report for the week ending July 7, the condition of the crop was rated 100 percent fair for the San Joaquin Valley of California. This rating in itself is unusual for the Valley and is a reflection of the cool, wet spring time planting conditions. The California State Department of Agriculture. Pink Bollworm program had mapped approximately 245,250 acres of cotton in the SJV as of June 28.

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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