Weekly Cotton Market Review – USDA

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Spot quotations averaged 156 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 61.60 cents per pound for the week ending Thursday, December 12, 2019.

The weekly average was up from 60.04 last week, but down from 75.37 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 60.88 cents Monday, December 9 to a high of 62.74 cents Thursday, December 12.

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Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 12 totaled 141,261 bales. This compares to 53,680 reported last week and 35,255 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 602,117 bales compared to 211,040 bales the corresponding week a year ago. The ICE March settlement price ended the week at 67.17 cents, compared to 64.51 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 higher. Trading of CCC-loan equities was inactive.

Mostly cloudy conditions prevailed across the lower Southeast during the period. Daytime high temperatures in the high 60s to 70s dropped into the low 50s as a cold front moved across the region late in the week.

Widespread showers brought moderate precipitation to areas throughout Alabama and the Florida Panhandle. Weekly accumulated precipitation totals measured from 1 to 3 inches across north Alabama. Around 1 inch of weekly accumulated moisture was received in south Alabama and the Florida Panhandle. Throughout Georgia, rainfall totals measured from trace amounts to around one-quarter of an inch of precipitation.

In Alabama and Florida, the moisture interrupted the harvesting of the last remaining fields. A period of dry and sunny conditions were needed to allow soft soils to firm enough to support equipment. Ginning continued uninterrupted as gins processed modules; a few gins had gone to gin days as they waited for backlogs of modules to accumulate on gin yards. The Macon Classing Office maintained around the clock classing operations.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released December 9, harvesting slowly advanced to 96 percent completed in Alabama and 93 percent completed in Georgia.

Sunny to overcast conditions were observed across the upper Southeast during the period. Daytime high temperatures varied from the low 50s to upper 70s and back into the low 50s as a cold front moved across the region. Light intermittent moisture was received across the Carolinas and the cotton growing areas of Virginia during the week. Rainfall totals measured from trace amounts to around one-quarter of an inch, with heavier accumulations of around one inch recorded along coastal North Carolina.

Harvesting and fieldwork advanced at a slow pace as producers harvested the last remaining fields where soils were firm enough to support equipment. Ginning continued uninterrupted; some gins had gone to gin days as they waited for the last modules to arrive on gin yards. The Florence Classing Office reduced operations to two shifts.

According to NASS, harvesting slowly advanced to 98 percent completed in Virginia and 96 percent completed in North and South Carolina.

Textile Mill

Inquiries from domestic mill buyers were light. No sales were reported. Reports indicated mill buyers had covered their raw cotton needs through the first quarter of 2020 and their current focus was scheduling deliveries of raw cotton to mills during the holiday season. 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. Demand was good throughout the Far East for any discounted styles of cotton.

Trading

  • A moderate volume of color 11, 21, and 31, leaf 2 and 3, staple 36-38, mike 37-49, strength 28-31, and uniformity 80-83 sold for around 300 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 3 and 4, staple 37-39, mike 43-49, strength 28-31, and uniformity 80-83 sold for around 150 points on ICE March futures, same terms as above.
  • A moderate volume of color 41, leaf 3 and 4, staple 36-38, mike 43-49, strength 28-31, and uniformity 80-83 sold for around 125 points on ICE March futures, same terms as above.
  • A light volume of color 51, leaf 4 and 5, staple 37-39, mike 37-49, strength 29-32, and uniformity 80-83 sold for around 400 points off ICE March futures, same terms as above.
  • A moderate volume of color 31, 41, and 51, leaf 2-4, staple 37, mike 43-49, strength 29-31, and uniformity 80-82 sold for around 100 points on 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported.

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Another storm front moved through the region during the reporting period. A wintry mix of sleet and rain brought less than 1 inch of precipitation during the week. Daytime temperatures dropped to the low 50s, rebounded into the 60s mid-week, then went back to the low 50s. Overnight lows in the 30s dipped into the 20s, then hovered in the low 40s. Harvesting and fall fieldwork were, for practical purposes, completed for the season in the Memphis territory.

Operating gins continued at a steady pace. According to the National Agricultural Statistics Service’s Crop Progress report released December 9, harvesting had reached 100 percent completed in Arkansas, and advanced slowly to 98 in Missouri and 97 percent in Tennessee. Reported yields were at around 1,300 pounds per acre. Producers made plans to attend various national and regional industry meetings.

South Delta

Spot cotton trading was slow. Supplies of available cotton were moderate. Demand was very light. Average local spot prices were higher. 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 and field activities in Mississippi progressed slowly. Some fieldwork was completed and soil amendments were applied in preparation for spring planting.

Ginning progressed with few delays due to mechanical or labor issues. According to the National Agricultural Statistics Service’s Crop Progress report released December 9, harvesting advanced very slowly to 98 percent in Mississippi. Reported yields of 1,200 pounds per acre were common. Producers made plans to attend various national and regional industry meetings.

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 27-33, and uniformity 79-83 traded for around 200 points off ICE March futures, FOB warehouse (compression charges not paid).

South Delta

  • A light volume even-running lot of color 51 and better, leaf 5, staple 37 and longer, mike 35-49, strength 28-33, and uniformity 79-83 traded for around 250 points off ICE March futures, FOB car/truck (Rule 5, compression charge paid).
  • A moderate volume of 2018-crop, CCC-catalog cotton, color mostly 52 and better, leaf 4 and better, staple 35 and longer, mike 37-52, strength 27-33, and uniformity 79-83 traded for around 300 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 higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Invitations to bid on CCC-Catalog cotton was opened on December 5 and closed on December 11 for a heavy volume of 2018-crop cotton. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Taiwan.

A few gins continued pressing services in the Coastal Bend and Upper Coast under intermittently rainy conditions. Producers prepared fields and applied fertilizer in the Rio Grande Valley. Dry conditions persisted and rain is greatly needed before the next cotton crop is planted. Most gins in the Blackland Prairies had finished for the season.

In Kansas, producers finished harvesting according to local reports, and ginning continued uninterrupted. All of the gins were now in operation. Producers were strip tilling fields. In Oklahoma, harvesting was completed and producers were preparing fields for next season. Stalks were shredded and fields were tilled. New seed beds were built. Cover crops were planted. Most use wheat or rye, but some cover crops consist of a mix including rye, clover, and radish. Ginning was estimated to be around 40 percent completed in southwestern Oklahoma.

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. Invitations to bid on CCC-Catalog cotton were opened on December 5 and closed on December 11 for a heavy volume of 2018-crop cotton. Foreign inquiries were moderate. Interest was best from India, Pakistan, and Taiwan.

Gusty, dry conditions prevailed with daytime high temperatures in the low 70s to low 40s, and overnight lows in the upper 20s to low 40s. Remaining harvesting activity was interrupted by foggy conditions early in the reporting period. Some gins finished pressing operations for the season, and some anticipated being done by the end of December. A few gins planned to operate into early January.

Modules were transported from fields to the gin yards. Stalks were shredded and fields were cultivated. Production is estimated at 2.35 million bales in the Southern High Plains, 975,000 bales in the Northern High Plains, and 850,000 bales in the Low Plains, according to the National Agricultural Statistics Service’s December Crop Production report released on December 10.

Trading

East Texas

  • In Texas, a moderate volume of mostly color 31 and better, leaf 3 and better, staple 36 and longer, mike 43-49, strength 30-34, and uniformity 80-83 sold for around 63.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of mostly color 22 and better, leaf 4 and better, staple 37, mike 37-42, strength averaging 34.5, and uniformity 80-81 sold for around 62.00 cents, same terms as above.
  • A heavy volume of 2018-crop, CCC-catalog cotton, mostly color 41 and 42, leaf 3 and 4, staple 36, mike 40-41, strength 27-31, uniformity 79-81, and 25 percent extraneous matter sold for 55.01 cents, same terms as above.
  • In Oklahoma, a heavy volume of mostly color 21 and 31, leaf 4 and better, staple 34 and longer, mike 30-44, strength 30-35, and uniformity 79-81 sold for around 60.00 cents, FOB car/truck (compression charges not paid).
  • A heavy volume of 2019 CCC-loan equities traded for 0.00 to 7.00 cents.

West Texas

  • A heavy volume of color 11 and 21, leaf 1 and 2, staple 37 and 38, mike 40-48, strength 30-33, and uniformity 79-81 sold for around 65.00 cents per pound, FOB car/truck (compression charges not paid).
  • A heavy volume of mostly color 22 and 32, leaf 4 and better, staple 33-35, mike 44-50, strength 27-33, and uniformity 79-81 sold for around 57.00 cents, same terms as above.
  • A heavy volume of mostly color 32 and better, leaf 3 and 4, 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 heavy volume of 2018-crop, CCC-catalog cotton, mostly color 31 and 41, leaf 3 and 4, staple 34-36, mike 37-50, strength 29-33, and uniformity 79-81 sold for 57.90 cents per pound, FOB warehouse (compression charges not paid).

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Producer offerings were moderate as ICE futures prices trended higher. Supplies were moderate. Demand was 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. Foreign mill inquiries were light.

Temperatures were mostly in the low 60s to low 70s in central Arizona. Light precipitation was received early in the period. Temperatures were in the 50s and 60s in New Mexico, and El Paso, TX. Scattered showers deposited around one-half of an inch of moisture. Harvesting was delayed again in New Mexico. Warehouses were busy receiving and shipping cotton. Ginning continued uninterrupted in the DSW.

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.

Temperatures were in the mid-50s to low 60s. A weak weather pattern brought scattered and at times heavy showers as well as colder temperatures into the SJV early in the period. Around one-half inches of rainfall were received; although some locales received less. An active weather pattern will set up into next week. Snowfall was received in the Sierra Nevada Mountain range. Dense fog advisories were prevalent in the morning hours after the storm system moved through.

Ginning was steady. The U.S. Bureau of Reclamation plans to restore a 33-mile stretch of the Friant-Kern canal located in the eastern SJV, due to sinking of the ground from groundwater extraction. The Friant-Kern canal delivers water to over 1-million acres and 250,00 residents. The Bureau plan entered the public input phase.

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.

A weak Pacific storm system entered the region early in the period. Scattered showers brought around one-half of an inch of moisture to the San Joaquin Valley of California. Stalk shredding continued. Modules were trucked to gin yards. Ginning continued uninterrupted in the region.

The Desert Southwest states also received rainfall. Precipitation amounts varied in Arizona, but were generally less than one-tenth of an inch. In New Mexico and El Paso, TX rainfall totals reached one-half of an inch. Wet weather continued to impact and delay final harvesting in Arizona and New Mexico.

Trading

Desert Southwest

  • In Arizona, a moderate volume of color 21 and 31, leaf mostly 2, staple 38 and 39, mike 43-49, strength averaging 31.9, and uniformity averaging 81.8 sold for around 67.25 cents per pound, uncompressed FOB warehouse.
  • A moderate volume of color 21, 31, and 12, leaf 3 and better, staple 36-39, mike averaging 45.9, strength averaging 31.7, and uniformity averaging 81.7 sold for around 63.75 cents, same terms as above.
  • A light volume mixed lot of New Mexico cotton, mostly color 31 and 42, leaf 4 and better, staple 36 and 37, mike averaging 43.0, strength averaging 30.0, and uniformity averaging 80.0 sold for around 60.00 cents per pound, 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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