Weekly Cotton Market Review – USDA

Cotton modules lined up in a gin yard. ©Debra L Ferguson

Spot quotations averaged 11 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 62.05 cents per pound for the week ending Thursday, October 31, 2019.

The weekly average was up from 61.94 last week, but down from 74.13 cents reported the corresponding period a year ago. Daily average quotations ranged from a season high of 62.84 cents Wednesday, October 30 to a low of 61.58 cents Thursday, October 31.

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Spot transactions reported in the Daily Spot Cotton Quotations for the week ended October 31 totaled 27,086 bales. This compares to 29,626 reported last week and 5,847 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 215,015 bales compared to 39,170 bales the corresponding week a year ago. The ICE December settlement price ended the week at 64.44 cents, compared to 64.65 cents last week.

Southeastern Markets Regional Summary

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

Mostly cloudy and overcast conditions dominated the weather pattern over the lower Southeastern region throughout the period. Daytime high temperatures were mostly in the low 70s to low 80s. Widespread showers brought moderate rainfall to areas throughout Alabama, the Florida Panhandle, and Georgia. Precipitation totals measured from one-half of an inch to two inches of moisture, with the heaviest accumulations of four to eight inches observed in areas throughout western Alabama.

Defoliation, harvesting, and fieldwork were delayed due to the wet conditions. Ginning continued uninterrupted as gins processed backlogs of modules. Some gins in south Georgia had reduced estimates for the season as yields on dryland acreage were lower than anticipated in some areas. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released October 28, harvesting advanced to 61 percent completed in Alabama and 56 percent completed in Georgia.

A mix of fair to cloudy conditions prevailed across the Carolinas and Virginia throughout the period. Daytime high temperatures were mostly in the mid-70s to low 80s. Widespread showers brought moderate rainfall to areas throughout South Carolina, eastern North Carolina, and Virginia. Precipitation totals measured from around one-quarter of an inch to one inch of moisture.

Damp conditions slowed defoliation and harvesting activities, but fieldwork continued as weather permitted. Gins continued to operate at capacity as they processed backlogs of modules on gin yards. According to NASS, harvesting advanced to 60 percent completed in South Carolina and Virginia, and 50 percent completed in North Carolina.

Textile Mill

Demand was good for color 31 and 41, leaf 4, and staple 34 and longer for first quarter through fourth quarter 2020 delivery. No sales were reported. Reports indicated most mills had covered their immediate-to-nearby raw cotton needs. 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

  • Even-running lots containing color 21 and 31, leaf 2 and 3, staple mostly 37, mike 43-49, strength 29-31, and uniformity 80-82 sold for around 70.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was very light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported.

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A series of storm fronts, mingled with a few days of clear weather, slowed fieldwork during the period. A severe storm moved through the region mid-week. Winds of up to 70 miles per hour were reported in western Tennessee, creating power outages and causing damage to a few buildings from downed trees. No injuries were reported as near-hurricane force winds ripped through the area.

Rain was widespread throughout the region, with up to 4 inches reported in some areas. Daytime high temperatures were in the 60s. Overnight lows were in the 50s early in the week, but Arctic air moving through the territory dropped temperatures into the low 30s.

Field activities, including harvesting, defoliation, and stalk shredding continued to be delayed in many places. Concern was high that unharvested cotton would be subject to grade reductions. Cool temperatures could also reduce the effectiveness of defoliants in late-planted fields. Ginning proceeded steadily in most cases, and classing proceeded around the clock.

According to the National Agricultural Statistics Service’s Crop Progress report released October 28, harvesting had reached 77 percent completed in Arkansas, 51 in Missouri, and 60 percent in Tennessee. Producers reported yields of around 1,300 pounds per acre.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was very light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Heavy rain showers mixed with sunny skies and light winds prevailed during the week. Up to 3 inches of rain were reported in isolated areas; although most areas reported less than 2 inches. Daytime highs were in the 60s. Overnight lows in the 50s dropped into the mid-30s as a cold front moved through the territory late in the week. Harvesting advanced slowly and other field activities were delayed, due to wet field conditions. Some gins experienced difficulty retrieving modules from muddy yards and turnrows.

Producers in Mississippi were concerned with the level of re-growth in unharvested fields. A few producers were concerned about the effectiveness of the defoliation chemicals, due to cool weather. Only a few pockets of abnormal dryness remained in Louisiana and Mississippi, according to the U.S. Drought Monitor. According to the National Agricultural Statistics Service’s Crop Progress report released October 28, harvesting had reached 88 percent completed in Louisiana and 73 percent in Mississippi. Reported yields ranged from 1,100 to 1,600 pounds per acre.

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 active. Supplies and producer offerings were heavy. Demand was very good. Average local spot prices were steady. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light to moderate. Interest was best from China, Pakistan, and Vietnam.

Ginning continued in the Rio Grande Valley, and was expected to be completed within 10 days. Gins in the Upper Coast and Coastal Bend neared completion and some planned to finish within the next two weeks. A cold front moved through south Texas on October 30, bringing up to 4 inches of rainfall and windy conditions. Daytime temperature highs in Corpus Christi were in the low 50s to mid-80s, and overnight lows were in the low 40s to upper 70s.

Producers applied fertilizer. Light rainfall along with colder temperatures was received in parts of the Blackland Prairies. Most of the harvesting was completed. Modules were transported to gin yards. Ginning continued uninterrupted.

Kansas received winter weather late in the reporting period, with daytime highs in the low 50s to mid-80s and overnight lows in the teens to mid-50s. Some snow was reported, but did not affect harvesting since the temperatures topped out in the 50s during the day. Harvesting was beginning to start in the southwestern counties. One gin had submitted samples so far this season, and another gin is waiting for parts.

In Oklahoma, a cold front brought drizzle that slowed harvesting, but with good weather, harvesting quickly restarted. According to local reports, harvesting was about 50 percent completed on irrigated acres, and about 30 percent completed on dryland acres. Yields were variable at 950 to 2,000 pounds per acre for irrigated and 350 to 550 pounds per acre for dryland.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were steady. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light to moderate. Interest was best from China, Pakistan, and Vietnam.

The period began with cold, damp conditions and freezing temperatures. Daytime temperature highs were in the upper 20s to upper 70s, and nighttime lows in the teens to upper 30s. Some areas in the Texas Panhandle received as much as 5 inches of snow. Harvesting was intermittently delayed during the reporting period in the High Plains, but expanded in the Rolling Plains.

The freezing temperatures and wind knocked off leaves and killed plants, thus eliminating the need for further chemical applications in most areas. Producers will now be able to focus on harvesting the crop quickly. Transporting modules from the fields to the gin yards was occasionally interrupted. Some gins needed modules to continue operations, and other gins had plenty of modules on the gin yards to keep busy.

Industry members have reported below average yields and grades. The causes were reported as the lack of rainfall and high temperatures in the 100s during August and September. Preliminary reports indicated that irrigated yields were also adversely affected as much as 30 percent lower than last season. Meetings were attended.

Trading

East Texas

  • In Texas, an even-running lot containing a moderate volume of mostly color 31 and better, leaf 3 and better, staple 36 and 37, mike 35-48, strength 26-33, and uniformity 76-80 sold for around 66.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of mostly color 12 and better, leaf 3 and better, staple 37, mike averaging 45.2, strength averaging 31.1, and uniformity averaging 81.0 sold for around 63.50 cents, same terms as above.
  • A moderate volume of mostly color 11 and 21, leaf 2 and 3, staple 36 and 37, mike averaging 47.7, strength 31-33, and uniformity averaging 81.2 sold for around 63.25 cents, same terms as above.
  • A heavy volume of 2019-crop CCC-loan equities traded for 2.50 to 8.50 cents.
  • A heavy volume of 2018-crop CCC-loan equities traded for 0 to 0.80 cents.

West Texas

  • A moderate volume of 2019-crop cotton, mostly color 11, leaf 1 and 2, staple 37, mike averaging 44.1, strength averaging 30.7, and uniformity averaging 80.8 sold for around 66.25 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a heavy volume of mostly color 32 and better, leaf 3 and better, staple 31-33, mike averaging 44.3, strength averaging 26.9, and uniformity 75-80 sold for 55.00 to 55.75 cents, same terms as above.
  • A moderate volume of mostly color 22 and better, leaf 1-3, staple 31 and 32, mike averaging 43.7, strength averaging 27.1, and uniformity averaging 78.6 sold for around 54.75 cents, same terms as above.
  • A light volume of 2019-crop CCC-loan equities traded for 2.25 cents.
  • A light volume of 2018-crop CCC-loan equities traded for -2.50 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

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

Temperatures were in the 70s and 80s in central Arizona. A cold front entered the region late in the period dropping temperatures into the 60s. Strong winds caused dusty conditions. Defoliation continued. Harvesting made good progress in central Arizona. A few gins experienced breakdowns, which slowed ginning. Initial ginning began in the Safford Valley mid-week. Safford Valley and surrounding areas in central Arizona experienced a hard freeze early morning on Thursday, October 31. October temperatures have not dipped to this level since 1975.

Daytime high temperatures were in the 70s for New Mexico and El Paso, TX. No rainfall was recorded in the period. The area was under a freeze watch that began early morning on Thursday, October 31. Overnight low temperatures were in the low 30s. The hard freeze will initiate the organic cotton harvest. Initial ginning began in New Mexico late in the period. No ginning was reported in El Paso, TX. The Visalia Classing Office began a night shift early in the week.

San Joaquin Valley (SJV)

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

Temperatures were in the 70s and 80s for most of the week. A cold front entered the region and dropped temperatures into the 60s. Strong winds blew smoke from surrounding wildfires into the Valley, which created hazy conditions. Air quality alerts were issued due to smoke. Harvesting gained momentum throughout the Valley. Producers shredded stalks in compliance with the California Pink Bollworm program. Saw-ginning and roller-ginning was active. The Visalia Classing Office began a night shift early in the week.

American Pima (AP)

Spot cotton trading was inactive. Supplies were moderate for 2018-crop cotton, but were light for 2019 crop.Demand was light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Shippers offered 2018-crop cotton.

Daytime high temperatures were moderate for most of the week. A strong cold front entered the region dropping temperatures into the 60s. Higher elevation cotton growing areas experienced a hard freeze in Arizona and New Mexico. For central Arizona, it has been nearly 40 years since low temperatures dipped into the 30s in October. No rainfall was recorded in the period. No ginning was reported in Arizona, New Mexico, and El Paso, TX. The Visalia Classing Office began a night shift early in the week.

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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