Weekly Cotton Market Review – USDA

Truck loaded with modules backing into gin. ©Debra L Ferguson

Spot quotations averaged 79 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 60.04 cents per pound for the week ending Thursday, December 5, 2019.

The weekly average was down from 60.83 last week and from 75.19 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 60.65 cents Friday, November 29 to a low of 59.41 cents Tuesday, December 3.

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Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 5 totaled 53,680 bales. This compares to 99,595 reported last week and 70,174 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 460,856 bales compared to 175,785 bales the corresponding week a year ago. The ICE March settlement price ended the week at 64.51 cents, compared to 65.81 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 lower. Trading of CCC-loan equities was inactive.

Sunny to partly cloudy conditions prevailed across the lower Southeastern region during the period. Daytime high temperatures varied from the low 50s to low 70s. Over the weekend, widespread showers brought heavy moisture to areas across north Alabama. Precipitation totals measured from 1 to 3 inches. Lesser accumulations from trace amounts to around one-half of an inch of moisture were received in central and south Alabama, the Florida Panhandle, and Georgia.

Harvesting and fieldwork were interrupted in Alabama and delayed in areas of the lower Southeast that received the heaviest precipitation. Ginning continued uninterrupted as gins continued to process backlogs of modules; a few smaller gins had reduced shifts as they planned to finish pressing operations for the season in the next couple of weeks.

The Macon Classing Office maintained around the clock classing operations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released December 2, harvesting slowly advanced to 94 percent completed in Alabama and 89 percent completed in Georgia.

A mix of cloudy and sunny weather prevailed across the upper Southeastern region during the period. Daytime high temperatures varied from the low 50s to low 60s during the week. Scattered showers brought from one-quarter of an inch to around one inch of moisture to portions of the Pee Dee region of South Carolina, eastern North Carolina, and Virginia.

Harvesting and fieldwork were delayed due to wet conditions. Ginning continued uninterrupted as gins continued to process backlogs of modules on gin yards. The Florence Classing Office continued around the clock classing operations. According to NASS, harvesting slowly advanced to 95 percent completed in South Carolina and Virginia, and 93 percent completed 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 the first quarter of 2020. Domestic cotton shippers and mill buyers were busy scheduling deliveries of raw cotton to mills during the holiday season. Open-end and ring-spun yarn demand was moderate. The undertone from mill buyers remained cautious as they monitored ongoing U.S./China trade negotiations.

Demand through export channels was moderate. Agents for mills in Indonesia and Pakistan inquired for a moderate volume of color 41, leaf 4, and staple 36 for nearby shipment. Demand was also good for any discounted or low-grade styles for nearby shipment.

Trading

  • A heavy volume of color 21 and 31, leaf 2 and 3, staple mostly 37 and 38, mike 37-49, strength 28-31, and uniformity 80-83 sold for around 325 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color 31 and 41, leaf mostly 3, staple mostly 37-39, mike 43-49, strength 28-31, and uniformity 80-83 sold for around 200 points on ICE March futures, same terms as above.
  • A moderate volume of color mostly 31 and 41, leaf 3, staple 34-37, mike 43-49, strength 28-30, and uniformity 80-82 sold for around 100 to 125 points on ICE March futures, same terms as above.
  • Mixed lots containing color mostly 41, leaf 3-5, staple mostly 35-38, mike 43-49, strength 28-30, and uniformity 81-83 sold for around 50 points on ICE March futures, same terms as above.
  • A moderate volume of color mostly 41 and 51, leaf 3 and 4, staple 36 and 37, mike 43-52, strength 29-31, and uniformity 80-83 sold for around 100 points off ICE March futures, FOB car/truck (Rule 5, compression charges paid).

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 lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

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Mostly cool and cloudy conditions prevailed during the reporting period. Scattered showers brought less than 1 inch of rain during the week. Daytime temperatures were mostly in the 50s and 60s. Overnight lows dipped into the low 30s early in the period, then stayed in the mid-40s. A few fields remained unharvested due to sporadic rain showers. Fall fieldwork was completed in some of the drier areas in the Memphis territory.

A number of gins had completed annual pressing operations, while larger gins continued steady operations. According to the National Agricultural Statistics Service’s Crop Progress report released December 2, harvesting had reached 99 percent completed in Arkansas, and advanced slowly to 95 percent in both Missouri and Tennessee. Reported yields were at 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 lower. Trading of CCC-loan equities was slow. No forward contracting was reported.

Light rain showers brought less than 1 inch of rain to the region early in the period. A cold front brought overnight low temperatures in the upper 20s. Daytime highs were mostly in the 50s and 60s early in the period, but rebounded to the 70s. Harvest was completed in Louisiana, but all field activities in Mississippi progressed slowly. Some fieldwork was completed and soil amendments were applied in preparation for spring planting.

A few gins finished annual operations, but most gins continued at a steady pace. Mechanical problems resulting in brief delays for a few gins. According to the National Agricultural Statistics Service’s Crop Progress report released December 2, harvesting had reached 100 percent completed in Louisiana and 97 percent in Mississippi.

Reported yields of 1,200 pounds per acre were common. According to the U.S. Drought Monitor, a few pockets of abnormally dry conditions continued to persist in parts of Louisiana; normal-to-surplus soil moisture conditions prevailed throughout the region.

Trading

North Delta

  • A moderate volume of 2018-crop, CCC-catalog cotton, color mostly 42 and better, leaf 4 and better, staple 36 and longer, mike 37-52, strength averaging 27-33, and uniformity averaging 79-83 traded for around 500 points off ICE March futures, FOB warehouse (compression charges not paid).

South Delta

  • A light volume of 2018-crop, CCC-catalog cotton, color mostly 42 and better, leaf 4 and better, staple 36 and longer, mike 37-52, strength averaging 27-33, and uniformity averaging 79-83 traded for around 500 points off ICE March futures, 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 lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Invitations to bid on CCC-Catalog cotton were opened on November 26 and closed on December 4 for a heavy volume of East Texas, Kansas, and Oklahoma 2018-crop cotton. Not all lots sold. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Turkey.

Gins in south Texas were finishing the season. A few gins will continue to operate into December in the Upper Coast. Ginning in the Winter Garden area is expected to continue into February. Several gins reported processing a record number of bales. Field preparations were underway in the Blackland Prairies for the next cropping season. Some gins completed the season, while ginning continued at other locations.

In Kansas, harvesting was 71 percent completed, contrasted with 47 percent last year, and ahead of 64 percent for the five-year average, according to the National Agricultural Statistics Service’s Crop Progress report released on December 2. The crop was rated mostly fair to good. Harvesting made good progress under warmer conditions. Modules were transported from the fields to the gin yards. Ginning continued.

In Oklahoma, according to NASS, cotton harvested was 83 percent completed, ahead of 80 percent last year, and ahead of 76 percent for the five-year average. The crop was rated mostly fair to good. Harvesting was completed in some areas and neared completion in other locations. Ginning made good progress under clear skies. Many producers and industry members attended the Amarillo Farm and Ranch Show to attend the Cotton U symposium.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. An invitation to bid on CCC-Catalog cotton was opened on November 26 and closed on December 4 for a light volume of 2018-crop cotton. Not all lots sold. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Turkey.

Gusty winds followed recent rainfall that helped dry soggy soils. Some fields were firm enough to enter for fieldwork and to pick up modules. Some areas, notably the Texas Panhandle, had completed harvesting, according to local reports. Ginning continued and more gins had begun to offer pressing services. Harvesting continued in the Southern Low Plains.

The Amarillo Farm and Ranch Show offered attendees the opportunity to earn continuing education credits, attend meetings, and network with manufacturers. The first ever Cotton U training was held in conjunction with the event. Regional industry meetings were attended.

Trading

East Texas

  • In Texas, an even-running lot containing a light volume of mostly color 11 and 21, leaf 2 and 3, staple 32-33, mike 39-47, strength 27-31, and uniformity 77-81 sold for around 53.50 cents per pound, FOB warehouse (compression charges not paid).
  • A light volume of mostly color 31, leaf 3 and 4, staple 30 to 32, mike 38-44, strength averaging 27.1, and uniformity 73-80 sold for around 50.50 cents, same terms as above.
  • In Oklahoma, a heavy volume of mostly color 21 and 31, leaf 3 and 4, staple 36-37, mike averaging 48.1, strength averaging 31.0, and uniformity averaging 81.2 sold for around 62.50 cents, FOB car/truck (compression charges not paid).
  • A heavy volume of 2018-crop, CCC-catalog cotton, color 41-54, leaf 3-5, staple 33-37, mike 44-47, strength 25-30, and uniformity 79-82 sold for around 40.00 cents, FOB warehouse (compression charges not paid).
  • A light volume of 2018 CCC-loan equities traded for -3.50 to -4.00 cents.

West Texas

  • A moderate volume of color 32, leaf 2 and 3, staple 36 and 37, mike 40-47, strength 31-33, and uniformity averaging 80.4 sold for around 58.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of mostly color 11, 21, and 22, leaf 3 and better, staple 33-35, mike 46-54, strength 27-32, uniformity 79-81, and 25 percent extraneous matter sold for around 54.00 cents, same terms as above.
  • A moderate volume of mostly color 32 and 42, leaf 3-5, staple 31-33, mike 38-47, strength 23-28, uniformity 76-81, and 25 percent extraneous matter sold for around 49.25 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 52.95 cents, FOB warehouse (compression charges not paid).
  • A light volume of 2018 CCC-loan equities traded for -1.00 to -3.25 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was moderate. 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 lower. No forward contracting or domestic mill activity was reported. An open invitation to bid on CCC-Catalog cotton was opened on November 26 and closed on December 4 for a light volume of New Mexico 2018-crop cotton. No sales were reported. Foreign mill inquiries were light. Interest was best from Pakistan and Turkey.

Temperatures remained above-average in Arizona, New Mexico, and El Paso, TX. Daytime temperatures were in the 60s and 70s. Cloudy conditions and chances of rain entered the region late in the period. Rainfall continued to make final harvesting difficult. This is the third week that scattered rains entered Arizona and New Mexico. New Mexico producers had not resumed harvesting after last weeks rainfall. Ginning continued; although rainy weather and breakdowns slowed progress.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. 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.

A Pacific storm front entered the state late in the period. Nearly 1 inch of rainfall was received in the week. Snow was deposited in the higher elevations of the Sierra Nevada Mountain range. Fieldwork was virtually completed. Ginning continued uninterrupted. A couple of gins completed their season.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2018-crop cotton were light. Supplies of 2019-crop cotton were 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.

Above-average temperatures continued for most of the reporting period in the Far West. A Pacific storm system entered the region late in the period. Rainfall accumulations were around one-quarter of an inch up to one inch. Rainfall continued to impact and delay final harvesting in Arizona and New Mexico. Ginning continued uninterrupted.

Trading

Desert Southwest

  • In Arizona, a light volume of color 11 and 21, leaf 2 and better, staple 35-39, mike averaging 38.0, strength averaging 31.9, and uniformity averaging 81.9 sold for 50 points on ICE March futures, uncompressed FOB warehouse.
  • A light volume of color 21, leaf 2, staple 35-39, mike 37-49, strength 29-33, and uniformity 80-82 sold for around 65.25 cents per pound, same terms as above.
  • A heavy volume of New Mexico cotton, mostly color 31 and 41, leaf 3 and better, staple 36 and 37, mike averaging 45.0, strength averaging 30.9, and uniformity averaging 81.5 sold for around 61.00 cents, FOB car/truck (compression charges not paid).

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.



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