Weekly Cotton Market Review – USDA

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

Spot quotations averaged 52 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 60.83 cents per pound for the week ending Thursday, November 28, 2019.

The weekly average was up from 60.31 last week, but down from 73.55 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 60.03 cents Friday, November 22 to a high of 61.16 cents Tuesday, November 26.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 28 totaled 99,595 bales. This compares to 36,236 reported last week and 37,633 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 407,176 bales compared to 105,611 bales the corresponding week a year ago. The ICE March settlement price ended the week at 65.81 cents, compared to 64.01 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were firm. Trading of CCC-loan equities was inactive. Fair to partly cloudy conditions were observed across the lower Southeast throughout the period.

Daytime high temperatures in the 70s dipped into the low 60s to upper 50s as a cold front moved across the region over the weekend, but temperatures warmed back into the 70s later in the holiday week. Widespread shower activity brought light to moderate precipitation to much of north Alabama and areas throughout Georgia.

In north Alabama and north Georgia, precipitation totals measured from around one-quarter of an inch to one inch of moisture. Harvesting and stalk shredding was briefly interrupted in areas that received the heaviest rainfall. Lesser accumulations of trace amounts to around one-half of an inch of moisture were observed in south Alabama, south Georgia, and the Florida panhandle. Harvesting and fieldwork mostly continued without interruption in these areas.

Backlogs of modules accumulated on gin yards and ginning continued around the clock. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 25, harvesting advanced to 92 percent completed in Alabama and 85 percent completed in Georgia. A mix of cloudy and sunny conditions were observed across the upper Southeastern region during the period.

Daytime high temperatures varied from the upper 50s to the low 70s. Scattered showers brought light to moderate precipitation to areas throughout the Carolinas and Virginia over the weekend. Precipitation totals measured from one-quarter of an inch to one-half of an inch in South Carolina.

Heavier accumulations of around  three-quarters of an inch to one inch were observed in North Carolina and Virginia. Harvesting and fieldwork was slowed or stopped in areas due to wet conditions. Entering the week, several days of sunshine helped to dry rain soaked lint and allow soft soils to firm.

Harvesting advanced as field conditions allowed. Gins continued to process backlogs of modules and the Florence Classing Office continued around the clock classing operations. According to NASS, harvesting advanced to 93 percent completed in Virginia, 92 in South Carolina, and 89 percent completed in North Carolina.

Textile Mill

Inquiries from domestic mill buyers was light, no sales were reported. Reports indicated that most mills have covered their raw cotton needs through the first quarter of 2020. Domestic mills were focused on scheduling deliveries of raw cotton to mills during the holiday season.

Some mills planned up to one week of downtime for the Thanksgiving holiday. Yarn demand was moderate and reported as lackluster approaching first quarter 2020; the undertone from mill buyers was cautious due to economic uncertainty regarding U.S./China trade relations.

Demand through export channels was moderate to good. Representatives for mills in Vietnam purchased a moderate volume of USDA Green Card Class, color 21 and 31, leaf 3, and staple 36 and 37 for nearby shipment.

Agents for mills in Pakistan purchased mixed lots containing color mostly 31 and 41, leaf mostly 3 and 4, and staple 36-38 for nearby shipment. Turkish mills inquired for any low grade styles of cotton for nearby shipment; no additional sales were reported.

Trading

  • Even-running lots containing color 41, leaf 3-5, staple 38, mike 45-47,  strength 31-33, and uniformity 81-84 sold for around 65.00 cents per pound, FOB car/truck (Rule 5, compression charges paid, 30 days free storage).

South Central Markets Regional Summary

North Delta

Spot cotton trading was slow. Supplies of available cotton were moderate. Demand was very light. Average local spot prices were firm. Trading of CCC-loan equities was inactive. No forward contracting was reported. Mostly cool and cloudy conditions prevailed during the reporting period.

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A storm system brought about 1 inch of rain early in the week. Daytime temperatures were mostly in the 50s and 60s. Overnight lows dipped into the low 30s, then hovered in the low 40s.

A few fields remained unharvested due to the unfavorable weather conditions. Fall fieldwork was completed in a few areas. Ginning continued at a steady pace, although a few smaller gins had completed annual pressing operations. Some larger gins still had a considerable amount of cotton left to gin.

According to the National Agricultural Statistics Service’s Crop Progress report released November 25, harvesting had reached 98 percent completed in Arkansas, 91 in Missouri, and 91 percent completed in Tennessee. Reported yields were around 1,250 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 firm. Trading of CCC-loan equities was slow. No forward contracting was reported. Heavy rain showers brought around 1 inch of rain to the region early in the period. Cold air moved in behind the front and overnight lows dropped into the mid-30s. Daytime highs were mostly in the low 60s to 70s.

Harvesting was virtually completed in Louisiana, but the precipitation slowed all field activities in Mississippi. Some fieldwork was complete and soil amendments were applied in preparation for spring planting. A few gins finished annual operations, but most gins continued at a steady pace. A few gins reported brief delays, due to mechanical problems.

According to the National Agricultural Statistics Service’s Crop Progress report released November 25, harvesting had reached 99 percent completed in Louisiana and 94 percent in Mississippi. Reported yields of 1,250 to 1,400 pounds per acre were widespread.

According to the U.S. Drought Monitor, a few pockets of abnormally dry conditions persisted in northeastern Louisiana; normal-to-surplus soil moisture conditions prevailed throughout the region.

Trading

North Delta

  • A light volume of color 42 and better, leaf 4 and better, staple 36 and longer, mike 42-47, strength 30-35, and uniformity 80-84 sold for around 62.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A heavy volume of 2018-crop, CCC-catalog cotton, color 42, leaf 5, staple 36 and 37, mike averaging 4.5, strength averaging 30.1, and uniformity averaging 81.9 sold for around 55.50 cents, FOB warehouse (compression charges not paid).

South Delta

  • A light volume of 2018-crop, CCC-catalog cotton, color 42, leaf 5, staple 36 and 37, mike averaging 4.5, strength averaging 30.1, and uniformity averaging 81.9 sold for around 55.50 cents per pound, FOB warehouse (compression charges not paid).

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 higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate.

Invitations to bid on CCC-Catalog cotton was opened on November 21 and closed on November 25 for a heavy volume of East Texas and Kansas 2018-crop cotton. Not all lots sold. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Turkey.

Some gins completed the season in south Texas and the Upper Coast, but a few continued to operate assisting other gins in pressing the remaining modules. Fieldwork was active and fertilizer was applied. Producers prepped fields for February sowing of grain and cotton. Ginning in the Winter Garden area is expected to continue into February.

Several gins in the Blackland Prairies completed the season, while other gins expected to press bales into January. Fields were shredded, plowed, and planted in winter wheat. Fertilizer was applied.

Dryland fields were harvested in Kansas. Irrigated fields had been harvested earlier. Stalks were shredded and fields were prepared for the next crop. In Kansas, cotton harvested was at 64 percent completed, ahead of 36 last year, and ahead of 53 percent for the five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on November 25.

Wind and rain in Oklahoma interrupted fieldwork and slowed module pickups in the fields. Module accumulations on gins yards was light, but no ginning interruptions were reported. According to NASS, cotton harvested was 74 percent completed, ahead of 68 percent last year, and ahead of 69 percent for the five-year average.

West Texas

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

An invitation to bid on CCC-Catalog cotton was opened on November 21 and closed on November 25 for a light volume of 2018-crop cotton. Not all lots sold. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Turkey.

Three cold fronts brought gusty winds on November 26, wintry precipitation on November 27, and thunderstorms on November 28. Daytime high temperatures were in the low 30s to 60s, and overnight lows were in the low 20s to 40s. Harvesting and module transportation were stalled mid-week.

Some gins closed for the Thanksgiving holiday so the weather delay was timely. Gins shut down operations when wind gusts became too high for fire safety. All of Texas was 68 percent harvested, compared to 58 percent the previous year, and ahead of 61 percent for the five-year average, according to the National Agricultural Statistics Service’s Crop Progress report released on November 25.

The organic crop was about 75 percent harvested, but only a limited amount has been ginned. Cover crops were planted.

Trading

East Texas

  • In Texas, an even-running lot containing a heavy volume of mostly color 31 and better, leaf 2 and 3, staple 36-39, mike 40-50, strength 28-37, and uniformity 78-83 sold for around 65.00 cents per pound, FOB warehouse (compression charges not paid).
  • A mixed lot containing a moderate volume of mostly color 32 and 43, leaf 2 and 3, staple 37 and 38, mike 43-48, strength 30-34, and uniformity 80-82 sold for around 56.00 cents, same terms as above.
  • In Oklahoma, a moderate volume of mostly color 21 and 31, leaf 3 and 4, staple 36-38, mike 42-49, strength 30-36, and uniformity 79-83 sold for around 64.00 cents, FOB car/truck (compression charges not paid).
  • A heavy volume of 2018-crop, CCC-catalog cotton, color 23, leaf 3, staple 35-38, mike 43-49, strength 29-31, and uniformity averaging 80.0 sold for 48.69 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of 2018 CCC-loan equities traded for -1.50 to -2.25 cents

West Texas

  • A heavy volume of color 11 and 22, leaf 1 and 2, staple 37 and 38, mike 39-51, strength 29-33, and uniformity 79-82 sold for around 66.75 cents per pound, FOB ar/truck (compression charges not paid).
  • A moderate volume of mostly color 21, leaf 2 and 3, staple 37, mike 40-49, strength 27-34, uniformity 78-83, and 25 percent extraneous matter sold for around 61.50 cents, same terms as above.
  • An even-running lot containing a moderate volume of mostly color 21 and 31, leaf 2-4, staple 34-37, mike 39-46, strength 27-32, and uniformity 77-82 sold for around 60.00 cents, same terms as above.
  • A light volume of 2018-crop, CCC-catalog cotton, mostly color 41, leaf 8, staple 37-40, mike 35-49, strength 27-32, and uniformity averaging 79.5 sold for around 50.39 cents per pound, FOB warehouse (compression charges not paid).

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and demand were light. Most producers put 2019-crop cotton into the CCC-loan program or into merchant marketing pools. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. An open invitation to bid on CCC-Catalog cotton was opened on November 21 and closed on November 25 for a light volume of New Mexico 2018-crop cotton. No bids were received. Foreign mill inquiries were light.

Temperatures stayed in the low 70s and high 60s in central Arizona as another system brought clouds and a chance of rain late in the period. Heavy rains from the previous week halted all harvesting in the Safford Valley for nearly five days as soils were too wet for fieldwork. Some module movement from fields to gins was also limited in the period.

Local sources reported about 90 percent of the crop was in modules prior to the storm. Strong winds from the west helped to dry fields from heavy morning dew mid-week. Temperatures were in the mid-60s to mid-50s for New Mexico and El Paso, TX.

A wind advisory was in effect for mid-week in southern New Mexico. Rainfall entered the area late in the period. Sources estimated 25 to 35 percent of the crop remained to be harvested. Harvesting and ginning continued. Most gins were taking two days off for the Thanksgiving holiday; others will take off for three or more days.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. Producers delivered 2019-crop cotton into the CCC-loan program or into merchant marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were in the 60s early week. Strong winds ahead of a winter storm dropped temperatures into the low 50s late in the period. Nighttime lows were in the 30s and 40s. The winter storm brought extremely cold temperatures and rain. Producers shredded stalks. Ginning continued uninterrupted. Most gins were taking two days off for the Thanksgiving holiday; others will take off for three or more days.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2018-crop cotton were light. Supplies of 2019-crop cotton moderate. Demand was light. Average local spot prices were steady. Producers delivered 2019-crop cotton into the CCC-loan program or into merchant marketing pools. No forward contracting or domestic mill activity was reported.

Foreign mill inquiries were light and mostly for prompt shipment. Temperatures varied in the 50s to the 70s, as clouds and rain entered the Far West region late in the period. Overnight lows were in the 40s and 50s.

Heavy showers late week slowed harvesting and module movement in central Arizona. Ginning continued uninterrupted in the region. Most gins were taking two days off for the Thanksgiving holiday; others will take off for three or more days.

Trading

Desert Southwest

  • A heavy volume of color 11 and 21, leaf mostly 2, staple 36-39, mike averaging 44.8, strength averaging 31.0, and uniformity averaging 81.7 traded for 64.00 cents per pound, uncompressed FOB warehouse.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

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