Weekly Cotton Market Review – USDA

Photo: Kay Ledbetter, Texas AgriLife Extension

Spot quotations averaged 107 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 53.69 cents per pound for the week ending Thursday, August 29, 2019.

The weekly average was down from 54.76 last week and from 79.19 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 53.04 cents Tuesday, August 27 to a high of 54.67 cents Thursday, August 29.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 29 totaled 10,167 bales. This compares to 9,726 reported last week and 2,719 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 28,919 bales compared to 11,266 bales the corresponding week a year ago. The ICE October settlement price ended the week at 58.88 cents, compared to 58.87 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.

Hot and sunny conditions entering the period gave way to cool and overcast conditions over the weekend and early week as a cold front entered the lower Southeastern region. Seasonably hot daytime temperatures in the low 90s dipped into the low to mid-80s, before warming again late week.

Widespread thunderstorms brought moderate to heavy moisture to areas throughout Alabama, the Florida Panhandle, and portions of south Georgia during the period. Precipitation totals measured from 2 to 4 inches in areas from the Gulf Coast to north Alabama, with heavier downpours observed in some areas.

The moisture was beneficial to dryland acreage. However, boll rot was reported in many irrigated fields. Some later planted fields were also treated for target spot. Producers had begun defoliating some of the earliest-planted fields, but were keeping a wary eye on hurricane Dorian as it approaches the Atlantic Coast. Plant growth regulators were applied to some younger fields. Producers continued to treat fields for stink bugs and isolated pockets of white flies.

Producers, ginners, and industry members attended annual state ginner meetings hosted by the Southeastern Cotton Ginners Association. Industry members reported harvesting had begun in some of the earliest-planted fields. A few gins plan to begin pressing operations in the next two to three weeks. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 26, cotton bolls opening advanced to 30 percent in Georgia and 29 percent in Alabama.

Similar conditions were observed across the upper Southeastern region during the period. Overcast skies were observed as a cold front moved across the region, causing seasonably warm temperatures to dip into the mid-70s to mid-80s over the weekend and early week. Sunny conditions returned late week and temperatures warmed into the upper 80s to low 90s. Scattered thunderstorms brought moisture to isolated areas throughout the Carolinas and Virginia. Weekly accumulated precipitation totals measured from one-half of an inch to one inch of moisture, with heavier accumulations reported in some areas. Producers welcomed the moisture which helped advance the crop. Insect pressure was generally light and easily controlled, and many fields were matured beyond the threat of insect damage. According to NASS, cotton bolls opening had reached 24 percent in South Carolina, 15 in North Carolina, and 11 percent in Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 36 for nearby delivery. Mill buyers also inquired for a moderate volume of color 41, leaf 4, and staple 35 and longer for first quarter through third quarter 2020 delivery. No sales were reported. Most mills have covered their raw cotton needs through December 2019. Demand for open-end and ring-spun yarn was moderate.

Demand through export channels was moderate. Agents for mills throughout the Far East inquired for any discounted or low-grade styles of cotton. No sales were reported.

Trading

  • No trading activity was reported.

South Central Markets Regional Summary

North Delta

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

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Most of the region continued to swelter under the hot temperatures that have prevailed over the past two weeks. Daytime highs were in the mid-90s, and overnight lows were in the low 70s. A cold front entered the region late in the period, bringing scattered showers and cooler conditions. Accumulated moisture measured less than 1 inch in the few places that received any rain.

The crop made slow progress under good growing conditions. The high temperatures experienced in recent weeks have helped push the crop to the stage where no further crop protection measures are necessary, except in fields that were planted very late. Some fields were treated to control plant bugs and bollworms. Boll opening advanced slowly.

Producers were hoping for clear skies and warm temperatures to help the crop finish and to facilitate defoliation, which was expected to begin within three weeks in some areas. There were some concerns in areas where heat and high humidity have created conditions conducive for boll rot.

According to the National Agricultural Statistics Service’s Crop Progress report released August 26, boll opening advanced to 18 percent in Arkansas, 13 in Missouri, and 8 percent in Tennessee. All of these figures were very near the five-year average. NASS rated the crop condition mostly good-to-excellent in Arkansas and Tennessee, and fair-to-good in Missouri.

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.

Hot daytime temperatures continued to dominate the weather pattern. Daytime highs were in the upper 90s, with the heat index well over 100. Hot, clear conditions were predicted for the week ahead. Early morning lows were in the upper 70s. Scattered showers brought less than 1 inch of rain to most of the region. Crop protection measures were no longer required in fields where bolls were opening, but producers continued to battle insect pests in late-planted fields.

Defoliation was expected to begin in the next few days, with harvest scheduled to commence in mid-September. Producers and ginners were busy preparing, repairing, or replacing harvest equipment and other harvest-related machinery. According to the National Agricultural Statistics Service’s Crop Progress report released August 26, boll opening reached 33 percent in Louisiana and 15 percent in Mississippi. Both figures lagged about two weeks behind the five-year average. NASS rated the crop condition mostly fair-to-good in Louisiana and Mississippi.

Trading

North Delta

  • A light volume of mostly color 41 and 42, leaf 4 and better, staple 37 and longer, mike 43-52, strength 28-32, and uniformity 80-84 traded for around 57.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of mostly color 42 and 52, leaf 4 and better, staple 35 and longer, mike 43-49, strength 26-30, and uniformity 80-83 traded for around 54.75 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 54.00 to 56.00 cents.

South Delta

  • No trading activity was reported.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was slow. 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 active. Foreign inquiries were moderate for new-crop. Inquiries were best from India, Turkey, and Vietnam.

In the Rio Grande Valley, harvesting had almost reached the half-way mark. Stalks were shredded ahead of the September 1 deadline. Producers were discouraged with market prices. Defoliation and harvesting expanded in the Upper Coast. More gins began operations and were submitting samples to the Corpus Christi Classing Office for classification. The Coastal Bend was approximately 80 percent harvested, and modules dotted the country side.

Winter Garden area producers were encouraged with expected irrigated yields up to four and one-half bales per acre and dryland making up to one and one-half bales per acre. In the Blackland Prairies, some stands have as much as 50 percent bolls opened and other stands are 10 days away from bolls popping open, according to local industry experts. Defoliants were applied ahead of harvesting. Equipment maintenance was conducted.

Cotton Blue disease was confirmed in central Texas. Gins are prepared to open in early September. Producers in Kansas and Oklahoma were encouraged as the crop advanced. Recent rainfall gave stands a much needed boost. Irrigation water was applied where needed. Bolls had begun to crack open in Kansas and Oklahoma.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate. Foreign inquiries were moderate for new-crop. Inquiries were best from India, Pakistan, and Vietnam.

Excessive heat warnings and heat advisories were issued with daytime high temperatures ranging from the mid-80s up to 114 degrees. Overnight lows were in the mid-60s to mid-80s. The excessive temperatures stressed stands and caused fruit shed. A cold-front brought cooler temperatures to some fields, and a reprieve from heat warnings and advisories overnight on the evening of August 26.

Temperatures retreated to the mid-80s for most areas. Irrigated fields made good progress. Some wells were declining and unable to keep up with irrigation needs in counties south of Lubbock. Dryland fields made little progress in most locations. Bolls on the low side of the plant were small, and some fields have wilted down under triple digit temperatures, according to local experts.

Isolated storms brought precipitation to some fields during the reporting period. Consistent rainfall near the New Mexico border and into the Texas Panhandle helped the dryland fields advance. Producers continued to scout for aphids, bollworms, and stink bugs. Crop tours, field days, and meetings were held.

Trading

East Texas

  • In Kansas, a mixed lot containing a light volume of mostly color 54 and better, leaf 5 and 6, staple 35 and 36, mike 37-42, strength 26-28, uniformity 78-81, and 100 percent extraneous matter sold for around 35.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a light volume of mostly color 62, leaf 6 and better, staple 35 and 36, mike 40-43, strength 26-28, and uniformity 78-80 sold for around 52.25 cents, same terms as above.
  • In Texas, a light volume of 2019-crop mostly color 21 and 31, leaf 1 and 2, staple 33 and 34, mike 46-50, strength 28-31, and uniformity 78-81 sold for around 50.00 cents per pound, FOB warehouse (compression charges not paid).
  • A heavy volume of CCC-loan equities traded for 40.25 to 52.00 cents.

West Texas

  • A light volume of mostly color 41, leaf 5 and better, staple 37, mike 39-42, strength 28-31, and uniformity 79-82 sold for around 54.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 52 and better, leaf 6 and better, staple 35 and longer, mike 26-44, strength 26-31, uniformity 77-82, and 50 percent extraneous matter sold for around 51.50 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 54.00 cents.

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.

Temperatures were in the low to mid-100s for most of the period. Excessive heat warnings were issued as temperatures rose to 111 degrees in central Arizona mid-week. This year has been one of the driest monsoon seasons on record. Defoliation continued in Yuma, AZ. Local sources reported harvesting began on a limited scale early in the period. Early yields were promising. Crop progress was good in central Arizona.

Industry representatives viewed the crop with renewed optimism. Temperatures were in the high 90s to low 100s in New Mexico and El Paso, TX. No rainfall was recorded in the period. Afternoon thunderstorms remained in the forecast. The crop made good progress.

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.

Hot, dry temperatures continued. Blooming and boll-setting advanced. The crop was irrigated. Overall, the crop made good progress. Producers and industry members attended annual meetings.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2018-crop cotton 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.

Hot, dry temperatures advanced the crop in the Far West. This year has been one of the driest monsoon seasons for the Desert Southwest. Defoliation continued in Yuma, AZ. Local sources reported harvesting began on a limited scale early in the period. The San Joaquin Valley crop made good progress. Producers irrigated and monitored for late season insect pests. Producers and industry members attended annual meetings.

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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