Weekly Cotton Market Review – USDA

Cotton in bloom. ©Debra L Ferguson

Average spot quotations were 428 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 53.47 cents per pound for the week ending Thursday, August 8, 2019.

The weekly average was down from 57.75 last week and from 84.26 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 52.73 cents Monday, August 5 to a high of 54.36 cents Thursday, August 8.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 8 totaled 2,872 bales. This compares to 8,394 reported last week and 4,113 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 3,619 bales compared to 4,631 bales the corresponding week a year ago. The ICE October settlement price ended the week at 59.54 cents, compared to 61.84 cents last week.

Southeastern Markets Regional Summary

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

Partly cloudy to fair conditions prevailed over the lower southeastern region during the period. Daytime high temperatures were in the upper 80s to low 90s. Spotty rain shower activity dominated the weather pattern and moisture was received in areas throughout Alabama, the Florida Panhandle, and Georgia. Weekly accumulated precipitation totals measured from trace amounts to around one and one-quarter inches of moisture, with locally heavier accumulations of two to four inches observed in isolated areas.

Producers welcomed the moisture which helped replenish soil moisture levels. Reports indicated plants were wilting and blooming out at the top in dryland fields that have missed significant moisture recently. Irrigated fields were running full watering schedules and the oldest planted fields had begun to cut out. Additional timely rainfall is needed to invigorate plants and enhance yield potential.

Producers applied growth-control regulators. Insect pressure was generally light; producers continued to treat fields for plant and stink bug infestations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 5, boll-setting advanced to 79 percent in Georgia and 78 percent in Alabama.

Fair to partly cloudy conditions dominated the weather pattern with late afternoon thundershowers bringing moisture to cotton growing areas of the upper southeastern region during the week. Daytime high temperatures were in the upper 80s to mid-90s. Weekly accumulated precipitation totals measured from one-half of an inch to two inches of moisture, with localized areas receiving heavier amounts of up to four inches during the period.

Producers welcomed the beneficial moisture which invigorated drought stressed crops and enhanced boll-retention. The crop advanced rapidly and producers sprayed fields with plant growth regulators.

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In North Carolina, local experts reported Cercospora leaf spot of cotton was present in cotton growing areas. Growers were encouraged to submit samples to local Cooperative Extension Agents and/or the NCSU Plant Disease and Insect Clinic for accurate identification.

In South Carolina, fields were blooming at the top and bolls were cracking open in the earliest planted fields. Additional timely moisture was needed to enhance plant vigor and increase boll-load in the top crop. Insect pressure was light to moderate; scouting continued and producers treated hot spots as needed. According to NASS, boll-setting reached 83 percent in North Carolina, 63 in South Carolina and 62 percent in Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 42 and better, leaf 5 and better, and staple 32 and longer for first quarter through second quarter 2020 delivery. Demand was also moderate for color 41, leaf 4, and staple 34 and longer for December delivery. No sales were reported. Reports indicated most mills have covered their raw cotton needs through fourth quarter 2019. Demand for open-end and ring-spun yarn was moderate. Demand through export channels was moderate. Demand was good throughout the Far East 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 and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported as cotton prices remained low. High daytime temperatures and afternoon rain showers, a few severe, dominated the weather pattern during the week. Daytime highs were in the mid-90s and overnight lows were in the low 70s.

High humidity drove the heat index into the low 100s, prompting the National Weather Service to issue heat advisories for many communities. Scattered showers brought up to 1 inch of rain to parts of the region; lightning strikes disrupted power briefly in various locales throughout the Memphis territory.

The crop advanced normally under ideal growing conditions. Fields were irrigated as necessary; producers with dryland crops reported that at least 1 more inch of rain in late August should help most fields with shallow-rooted plants finish. More rain is in the forecast for later this week.

According to the National Agricultural Statistics Service’s Crop Progress report released August 5, boll setting advanced to 91 percent in Arkansas, 48 in Missouri, and 65 percent in Tennessee; crop development in Missouri continued to lag at least 2 weeks behind the 5-year average. Field were scouted carefully for aphid, plant bug, boll worm, and stink bug populations.

Fields were mostly spot treated, as necessary, to control infestations of aphids and plant bugs. Plant growth regulators and fertilizer were applied to fields in Missouri. Producers reported that more fields had reached cut-out, but others will require further inputs in protect yields.

South 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 as cotton prices remained low. Clear, hot days and afternoon thunder showers were experienced during the week. Daytime highs were in the upper 90s and overnight lows were in the upper 70s. The National Weather Service issued a heat advisory for many places.

Scattered showers brought up to 1 inch of rain to most of the region, while localized places received as much as 3 inches of precipitation. Boll shed was reported in fields that received heavier amounts of moisture. The crop made excellent progress under good conditions in Louisiana, and steady progress in Mississippi. According to the National Agricultural Statistics Service Crop Progress report released August 5, boll setting surged to 91 percent in Louisiana and 68 percent in Mississippi.

Fields with target spot and bacterial blight were treated with fungicide to control outbreaks. Local experts reported that bollworm populations were high and some damage was evident. Plant bugs were also a problem in some areas, along with spider mites dry fields that failed to receive any rain recently. Treatments were made as necessary to control infestations and to prevent further potential yield loss. Crop advisors also reported that protection measure will be necessary into mid-September to insure good yields in late-planted fields.

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 slow. Supplies were moderate. Demand and producer offerings were light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate. Foreign inquiries were light, but moderate for new-crop.

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Harvesting expanded on dryland acres in the Rio Grande Valley, according to local experts. A few irrigated fields were ready to be picker harvested late in the period. Night crews were added at some gins. No rain or weather delays were reported.

Harvesting was underway in the southern part of the Coastal Bend, and bolls had begun to pop open in other parts. Defoliants were applied. Harvesting expanded steadily up the coast. A few more gins started operations. Sample receipts increased at the Corpus Christi Classing Office. Isolated showers were received in the Blackland Prairies, but more rainfall is needed. The crop was blooming and progress was slow. Meetings were attended.

In Kansas, squaring was 78 percent, trailing behind last year’s 95, but near the 5-year average at 75 percent, according to the National Agricultural Statistics Service’s (NASS) crop progress report, released on August 5. Setting bolls was 26 percent, behind 32 last year, and the same as the 5-year average. The Abilene Classing Office classed 726 Kansas samples for the 2018-crop on August 7.

In southwest Oklahoma, irrigation water was abundant and producers took advantage pushing the crop to catch up. Dryland suffered under hot, sunny conditions with temperatures in the triple digits. Squaring reached 94 percent, compared to 88 last year and the 5-year average at 90 percent, according to NASS. Setting bolls had reached 40 percent, 4 points lower than last year, and 6 points lower than the 5-year average at 46 percent.

West Texas

Spot cotton trading was slow. 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, but moderate for new-crop.

Irrigation was underway with daytime high temperatures in the low 90s to low 100s, and overnight lows in the low 60s to low 80s. A few areas received up to one and one-half inches of much needed rainfall, but a widespread general rain event is needed to help the crop progress. The underground moisture coupled with deep tap roots is advancing the dryland crop. Stand maturity continued to vary from beginning to bloom to past physiological cutout.

Shedding of squares and small bolls is expected as a natural adjustment to the fruit load, according to the West Plains IMP Update published on August 1. Producers and industry specialist continued to scout for plant pests and treat as necessary. Pigweed was problematic. Cultivation and spraying were underway. Hoe crews were actively removing weed escapes.

Trading

East Texas

  • In Oklahoma, a mixed lot containing a light volume of mostly color 43 and better, leaf 5 and better, staple 33 and 34, mike averaging 44.6, strength averaging 27.4, and uniformity averaging 78.9 sold for around 48.00 cents a pound, FOB warehouse (compression charges not paid).

West Texas

  • A mixed lot containing a heavy volume of mostly color 21, 31, and 41, leaf 4 and better, staple 35-39, mike 32-52, strength 26-35, and uniformity 77-83 sold for around 57.25 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of mostly color 31 and 41, leaf 4, staple 35 and 36, mike averaging 34.2, strength averaging 30.0, uniformity averaging 80.2, and 25 percent extraneous matter sold for around 54.75 cents, same terms as above.
  • A mixed lot containing a light volume of color 42 and better, leaf 4 and better, staple 35 and longer, mike 33-50, strength 24-33, and uniformity 77-82 sold for around 53.00 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.

Triple-digit temperatures were the norm. Partly cloudy conditions and monsoon activity brought scattered showers throughout the DSW region. Precipitation amounts ranged from one-tenth of an inch to one-quarter of an inch. Hot, dry weather advanced the Arizona crop. Boll-setting was good. Producers managed the crop to reduce heat stress. Insect activity was light and easily controlled. Initial defoliation began in Yuma. Monsoon activity produced thunderstorms and welcome showers for cotton-growing areas of New Mexico and El Paso, Texas in the period.

The crop made good progress. Irrigation water availability was good and will continue to flow until September 30. Planted acreage for current crop was limited due to a lighter snowpack at the beginning of the planting season. Sources reported the 2020 water season will begin on March 1, as the late snowpack filled reservoirs to near capacity. This will be the earliest release date in nearly 5 years.

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 low 100s. The crop continues to make good progress. According to the National Agricultural Statistics Service’s crop progress report, the condition of the crop was rated at 70 percent fair, 25 good, and 5 percent excellent. Irrigation schedules continued. Insect pressures were mild and easily controlled.

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. Interest was best from Bangladesh. Triple-digit temperatures were prevalent throughout the Arizona, California, New Mexico, and El Paso, Texas. Daytime highs were in the low 100s to the mid-110s. Monsoon moisture deposited one-quarter of an inch up to one-half of an inch in Desert Southwest. The crop made good progress. Insect pressure was light; although pest control advisors recommended to continue to survey the crop for late-season pests. Initial defoliation began in Yuma, Arizona.

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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