Weekly Cotton Market Review – USDA

Cotton modules in front of cotton gin. ©Debra L Ferguson

Average spot quotations were 136 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 55.97 cents per pound for the week ending Thursday, September 12, 2019.

The weekly average was up from 54.61 last week, but down from 78.98 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 54.52 cents Friday, September 6 to a high of 58.54 cents Thursday, September 12.

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Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 12 totaled 25,783 bales. This compares to 9,526 reported last week and 216 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 64,228 bales compared to 12,127 bales the corresponding week a year ago. The ICE October settlement price ended the week at 62.25 cents, compared to 59.16 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 higher. Trading of CCC-loan equities was inactive.

A mix of sunny to partly cloudy weather conditions were observed throughout the period. Daytime high temperatures were in the low to mid-90s. Mostly dry conditions prevailed during the week, but scattered showers brought light localized moisture to portions of Alabama and Georgia. Weekly accumulated rainfall totals measured from trace amounts to around one-half of an inch.

High temperatures advanced the crop at a rapid pace and bolls were cracking open across the region. Defoliation was gaining momentum in the earliest-planted fields. Producers would welcome additional moisture on later planted fields to help advance crop maturity to completion. Harvesting had begun in the earliest-planted fields and the first gins had begun pressing operations for the season.

The Macon Classing Office received their first cotton samples of the season and have started classing operations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 9, cotton bolls opening advanced to 59 percent in Georgia and 57 percent Alabama.

Hurricane Dorian battered coastal North Carolina early in the period with heavy rainfall and damaging winds. Rainfall totals measured from 2 to 4 inches, with heavier accumulations in excess of 8 inches observed in some areas. The storm toppled trees, downed power lines, and damaged building structures. Crop damage was reported in eastern counties near the coast and the Blacklands.

Heavy winds blew lint out of bolls, tangled cotton, and laid plants down on the ground. Following the storm, producers estimated losses and evaluated cotton that remained harvestable. Sunny conditions late in the period helped to dry out rain soaked lint.

Elsewhere in the upper Southeastern region, mostly hot, dry conditions advanced the crop at a rapid pace and bolls were cracking open. Producers considered defoliation options. According to NASS, cotton bolls opening had reached 56 percent in South Carolina, 41 in Virginia, and 40 percent in North Carolina.

Textile Mill

Inquiries from domestic mill buyers were light. No sales were reported. 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. Agents in China Free Trade Zones and India inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 and longer for nearby shipment. Pakistani mill buyers inquired for a moderate volume of color 51 and better, leaf 5 and better, and staple 32 and longer for nearby shipment. No sales were reported.

Trading

  • A moderate volume mixed lot of 2018-crop, color mostly 41 and 42, leaf 3 and 4, staple mostly 36 and 37, mike 43-52, strength 26-29, and uniformity 80-82 sold for around 57.00 cents per pound, FOB car/truck (Rule 5, compression charges paid.

South Central Markets Regional Summary

North Delta

Spot cotton trading was active. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Producers who have not marketed their 2018-crop were faced with the expense of forfeiting it to the CCC-loan.

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Clear skies and hot temperatures characterized the weather pattern during the week. Daytime highs were in the 90s and overnight lows were in the 70s. No rainfall was recorded in the Memphis territory. The crop made good progress under ideal conditions. Insect pressure was no longer an issue. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 9, bolls opening advanced to 66 percent in Arkansas, 29 in Missouri, and 27 percent in Tennessee.

NASS continued to rate the crop condition mostly good-to-excellent in Arkansas and Tennessee, and fair-to-good in Missouri. Defoliation was just getting underway in most areas. Gin companies were making final preparations to begin annual pressing operations. Lake and Lauderdale Counties in Tennessee have been designated as primary natural disaster areas by Agriculture Secretary Sonny Perdue.

This allows the Farm Service Agency to extend much-needed emergency credit to producers to help them recover from prolonged and excessive rain and flooding earlier this year. This coverage will also extend to contiguous counties, including those in Arkansas and Missouri.

South Delta

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

Very hot daytime temperatures continued to dominate the weather pattern. Daytime highs were in the upper 90s, with the heat index well over 100. Early morning lows were in the upper 70s. Light and scattered showers brought less than one-quarter of an inch of moisture to isolated areas. The hot, clear weather conditions were ideal for field activities.

Defoliation expanded over a widespread area. Limited harvesting was underway in Louisiana. Producers and ginners in Mississippi continued to prepare harvest equipment and machinery for the rapidly approaching harvest.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 9, bolls opening reached 65 percent in Louisiana and 42 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 heavy volume of 2018-crop, color mostly 41 and 42, leaf 4 and better, staple 35 and longer, mike 43-54, strength 27-33, and uniformity 81-84 traded for around 58.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A heavy volume of CCC-loan equities traded for 57.00 to 59.00cents.

South Delta

  • No trading activity was reported.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was slow. Supplies and producer offerings were heavy. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were moderate for new-crop. Interest was best from China, Pakistan, and Taiwan.

In the Rio Grande Valley, fields had begun to dry and fieldwork re-started. Producers shredded stalks and applied herbicides to eliminate vegetation that could host overwintering boll weevils. Yields were reported at two and one-half to three bales per acre. Yields were greatly affected by field flooding that had occurred in June, and the week of September 2.

Harvesting progressed in the Upper Coast, but spotty rainfall delayed harvesting in the Coastal Bend. Defoliants were applied in the northern Blackland Prairies and harvesting was underway. Some gins had begun offering ginning services. Kansas cotton was mostly fair-to-good, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 9.

Bolls opening were at 9 percent, which trailed behind the 23 percent reported last year and the five-year average of 18 percent. In Oklahoma, cotton was rated mostly fair-to-good, according to NASS. Bolls opening were at 40 percent, ahead of 33 percent last season, and the five-year average of 24 percent. Producers were encouraged by the yield potential for both dryland and irrigated acreage. The Oklahoma crop is progressing and bolls were filling in.

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 active. Foreign inquiries were moderate for new-crop. Interest was best from China, Pakistan, and Taiwan.

Cooler conditions prevailed with daytime high temperatures in the low 80s to mid-90s and overnight lows in the 60s. Most areas received from a trace up to 2 inches of rainfall during the reporting period. Local reports indicated that irrigated stands were loaded with bolls and maturing. The last irrigation will probably be applied during the week of September 16. Cotton bolls are popping open across the territory.

Texas A&M Agrilife extension specialists monitored for plant pests and diseases. Aphids were present, but not increasing. Beneficial insects helped with control. Stinkbugs and lygus have also been reported. Careful monitoring was underway for Verticillium wilt and Southwestern Cotton Rust in a few counties.

Some stripper harvesting had begun on dryland acreage, but most producers were expected to wait until temperatures drop below freezing in late October. The first bale on the High Plains was harvested and delivered on September 2, according to the Seminole Area Chamber of Commerce.

Trading

East Texas

  • In Texas, a light volume of new-crop mostly color 11, leaf 2 and 3, staple 38, mike averaging 43.1, strength 30-32, and uniformity averaging 82.0 sold for around 58.00 cents per pound, FOB warehouse (compression charges not paid).
  • A light volume of mostly color 11 and 21, leaf 2 and 3, staple 37 and 38, mike 46-50, strength 29-31, and uniformity 80-82 sold for around 57.50 cents, same terms as above.
  • A light volume of mostly color 31, leaf 2 and 3, staple 35-39, mike 44-51, strength 27-31, and uniformity 79-82 sold for around 54.50 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 49.75 to 59.25 cents.

West Texas

  • A light volume of mostly color 41, leaf 4 and 5, staple 36 and 37, mike averaging 40.4, strength averaging 29.3, and uniformity averaging 81.6 sold for around 53.00 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a heavy volume of mostly color 41 and 42, leaf 4-6, staple 35 and 36, mike 33-42, strength 27-31, uniformity 78-81, and 75 percent extraneous matter sold for around 35.00 cents, same terms as above.
  • A mixed lot containing a light volume of mostly color 51 and 52, leaf 3 and 4, staple 34 and 35, mike 44-49, strength 25-27, and uniformity 77-80 sold for around 47.00 cents, FOB warehouse (compression charges not paid).
  • A heavy volume of CCC-loan equities traded for 47.75 to 58.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. Producers intend to put new-crop cotton into the CCC-loan program as ICE futures prices continue lackluster performance. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Most mills continued to remain on the sidelines for US cotton.

Triple-digit temperatures continued with a high of 109 degrees. Temperatures moderated to around 100 degrees mid-week. The first 2019-crop cotton from Yuma was received early in the reporting period. Quality results from early pickings were typical for the area. The central Arizona crop advanced to cut-out stage. Final irrigations were performed early in the period.

Initial defoliation began and some picking was set to begin next week. Producers attended annual meetings. Temperatures were in the 90s for New Mexico and El Paso, TX. Sources reported the crop made good progress and approached cut-out stage. Timely monsoon activity with no hail helped the crop catch up in many locations. Producers were optimistic about yields.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Most mills continued to remain on the sidelines for US cotton.

The Valley received a break from triple-digit heat mid-week. Temperatures were in the high 80s and morning lows were in the high 50s. It felt like fall. The crop made good progress. Bolls were cracking open. Producers prepared for harvest.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2018-crop cotton were moderate. Demand was light. Average local spot prices were steady. Producers were willing to let new-crop cotton sit in the CCC-loan program and wait for prices to improve. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Merchants worked to preserve previously made sales.

Temperatures were in the 90s to high 100s in the Far West. Harvesting neared completion in Yuma, AZ. Modules were trucked to the gin yard. The San Joaquin Valley crop made good progress. Bolls were cracking open. Producers prepared equipment for harvest.

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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