Weekly Cotton Market Review – USDA

Cotton harvest - row of pink wrapped modules. ©Debra L Ferguson

Average spot quotations were 214 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 58.11 cents per pound for the week ending Thursday, September 19, 2019.

The weekly average was up from 55.97 last week, but down from 76.10 cents reported the corresponding period a year ago. Daily average quotations ranged from a season high of 59.09 cents Tuesday, September 17 to a low of 57.76 cents Thursday, September 19.

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Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 19 totaled 27,518 bales. This compares to 25,783 reported last week and 3,016 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 91,746 bales compared to 15,143 bales the corresponding week a year ago. The ICE December settlement price ended the week at 60.33 cents, compared to 62.21 cents last week.

***********ANNOUNCEMENT***********

An open invitation to bid on CCC-Catalog Cotton was released on September 17 for North Delta, East Texas-Oklahoma, West Texas, and DSW 2018-crop cotton. The closing date is September 24. More information is available here.

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.

Mostly sunny to partly cloudy conditions prevailed over the lower Southeastern region during the period. Seasonably, hot daytime temperatures varied from the upper 80s to low 100s. Very light, localized moisture was received in portions of north Alabama and coastal Georgia during the week. Rainfall totals measured from trace amounts to around one-half of an inch.

The crop advanced under hot conditions and bolls were cracking open. Defoliation was expanding in the earliest-planted fields and harvesting was getting underway. Local experts reported that plant maturity and yield potential was widely variable in some areas that missed consistent rainfall. Modules were building in fields and arriving at gin yards. Additional gins had begun pressing operations for the season. Sample receipts were increasing at the Macon Classing Office.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 16, cotton bolls opening advanced to 70 percent in Alabama and Georgia.

Fair to partly cloudy conditions were observed across the upper Southeastern region. Daytime high temperatures varied from the low 90s entering the period to the uppers 70s later in the week. Widespread scattered thundershowers brought localized moisture to areas throughout South Carolina and cotton growing areas of the North Carolina and Virginia coastal plain. Weekly accumulated precipitation totals measured from trace amounts to around 2 inches of moisture.

The crop advanced under the warm conditions and producers began applying defoliants to the oldest fields. Less than optimum defoliation results were reported in some fields in coastal areas of North Carolina along the path of Hurricane Dorian; lodged cotton plants with damaged root systems resulted in poor uptake of defoliants. Bolls were cracking open and harvesting had begun on a limited basis. According to NASS, cotton bolls opening had reached 71 percent in South Carolina, 61 in North Carolina, and 56 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 October 2019. Demand for open-end and ring-spun yarn was moderate.

Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted styles of cotton. No 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 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. An air quality alert was issued by the National Weather Service for the Memphis area, due to excessive ozone. No rainfall was recorded in the region. Cotton specialists reported that the excessive heat was taking a toll on late-planted fields and that some yield reduction was probable. Producers were hoping for rain showers to provide relief from the heat and dusty conditions.

Harvesting activities advanced under ideal conditions, and covered the spectrum from defoliation to stalk shredding. A few gins were just getting underway. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 16, bolls opening advanced to 85 percent in Arkansas, 48 in Missouri, and 47 percent in Tennessee. Harvesting had reached 4 percent complete in Arkansas. NASS continued to rate 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported as cotton prices remained low.

Very hot daytime temperatures prevailed during the week. Daytime highs were in the upper 90s, with the heat index well over 100. The National Weather Service reported that average daily high temperatures were about 10 degrees above average for this time of year. Early morning lows were in the upper 70s. Scattered showers brought trace amounts of moisture to isolated areas.

The hot, clear weather conditions were ideal for field activities; however, local experts reported that the excessive heat was taking a toll on late-planted fields and that some yield reduction was probable. Producers were hoping for rain showers to help moderate the heat and settle the dust.

Defoliation expanded over a widespread area. Harvesting gained momentum in Louisiana. Several gins had collected sufficient modules on their yards to commence annual pressing operations. Producers and ginners in Mississippi continued to prepare equipment and machinery.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 16, bolls opening reached 77 percent in Louisiana and 60 percent in Mississippi. Both figures lagged about one week behind the five-year average. Harvesting had reached 9 percent complete in Louisiana; harvesting was expected to expand rapidly in Mississippi. NASS rated the crop condition mostly fair-to-good in Louisiana and Mississippi.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • No trading activity was reported.

Southwestern Markets Regional Summary

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies and producer offerings were heavy. Demand was moderate. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light.

Heavy rainfall from Tropical Depression Imelda stayed mostly along the coast and had little to no impact on harvesting and ginning, according to local sources. Ginning continued in the Rio Grande Valley, Coastal Bend, and Upper Coast. Stripper harvesting expanded in the Blackland Prairies and in the Brazos river bottoms. Several gins opened to offer ginning services. Modules dotted the fields and were transported to gin yards. Bales were delivered to the warehouses. Spotty rainfall slowed progress in some locations.

In Kansas, stands progressed with daytime temperature highs in the mid-80s to mid-90s. Irrigation continued. Harvesting was two to three weeks away.

In Oklahoma, defoliation progressed under warm and windy conditions. Harvesting will commence next reporting period, and ginning was expected to initiate within three weeks. Rainfall is in the nearby forecast. Industry meetings were attended.

West Texas

Spot cotton trading was moderate for the 2018-crop. 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 light.

Cooler conditions prevailed with daytime high temperatures in the low 80s to mid-90s and overnight lows in the 60s. Defoliants were applied on dryland fields and harvesting had begun, according to local experts. Fields west and north of Lubbock were late, and need the heat units to build in September. Those areas will wait for the crop to mature, and a frost to help knock off the leaves.

Pre-harvesting activities were delayed on September 13 and 14. Widespread rainfall brought upwards of 3 inches of precipitation to some areas that left fields and roadways flooded early in the reporting period. Spotty showers throughout the period continued to interrupt fieldwork.

Grower appreciation events were hosted by several gins ahead of the ginning season. Most gins are ready to start processing cotton, but will wait until the meters are read towards the end of the month. The U.S. Department of Agriculture announced that warehouse operators in southern Texas may apply for authorization to store cotton outside in specifically designated areas, effective September 9, 2019 through January 31, 2020.

Trading

East Texas-Oklahoma

  • In Texas, a moderate volume of new-crop mostly color 21 and 31, leaf 2 and 3, staple 36 and longer, mike 42-47, strength 27-34, and uniformity 79-83 sold for around 60.00 cents per pound, FOB warehouse (compression charges not paid).
  • A heavy volume of color 31 and better, leaf 1 and 2, staple 35 and longer, mike 44-51, strength 26-31, and uniformity 77-81 sold for around 58.25 cents, same terms as above.
  • A mixed lot containing a moderate volume of mostly color 41 and better, leaf 4 and better, staple 33 and 34, mike 40-53, strength 25-31, and uniformity 77-83 sold for around 51.00 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 0.50 to 1.25 cents.

West Texas

  • A light volume of 2018-crop cotton mostly color 41 and 42, leaf 5 and 6, staple 37, mike 36-42, strength 29-30, uniformity 80-82, and 75 percent extraneous matter sold for around 50.25 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a light volume of mostly color 41 and 42, leaf 4-7, staple 35 and 36, mike 30-36, strength 27-29, uniformity 78-80, and 100 percent extraneous matter sold for around 48.00 cents, same terms as above.
  • A mixed lot containing a light volume of mostly color 42, leaf 5-7, staple 36 and 37, mike 41-43, strength 27-28, uniformity 80-82, and 100 percent extraneous matter sold for around 42.25 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 0.00 to 2.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the high 90s to low 100s. The central Arizona crop advanced to cut-out stage. Defoliation activities commenced. Ginning continued in Yuma, AZ. Temperatures continued to be mild in New Mexico and El Paso, TX. Sources reported the crop made good progress and approached cut-out stage. Producers prepared equipment for harvest. Gins made final repairs.

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.

A low-pressure system entered the region mid-week and produced windy conditions with blowing dust. Light precipitation was received in the Sacramento Valley. No moisture was recorded in the SJV. Snowfall was received in the Sierra Nevada Mountain range in elevations over 8,000 feet. Temperatures dropped 20 degrees in the SJV. Temperatures were in the low 80s.

The crop made good progress. Boll counts were good, but perhaps not as sizable as last year. Several fields had open bolls on the bottom of plants. Whitefly pressure was minimal and required no control measures. 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 lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures turned moderate mid-week for the region. A low-pressure system dropped temperatures into the low 80s to high 90s. The crop was maturing rapidly and approaching cut-out in the region. Defoliation commenced in central Arizona. Producers in the Safford Valley prepared for defoliation activities. The San Joaquin Valley crop made good progress. Bolls were cracking open. Boll counts were good, but perhaps not as sizable as last year. Producers prepared equipment for harvest.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A heavy volume of new-crop cotton was sold to Pakistan.

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