Weekly Cotton Market Review – USDA

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Spot quotations averaged 70 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 63.67 cents per pound for the week ending Thursday, February 13, 2020.

The weekly average was up from 62.97 last week, but down from 66.07 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 63.32 cents Friday, February 7 to a high of 64.15 cents Wednesday, February 12.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 13 totaled 32,629 bales. This compares to 22,305 reported last week and 25,185 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,271,622 bales compared to 537,993 bales the corresponding week a year ago. The ICE March settlement price ended the week at 67.75 cents, compared to 67.91 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #17 FOR UPLAND COTTON February 13, 2020

The Department of Agriculture’s Commodity Credit Corporation today announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. The quota will be established on February 20, 2020, allowing importation of 12,096,232 kilograms (55,557 bales) of upland cotton.

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Quota number 17 will be established as of February 20, 2020 and will apply to upland cotton purchased not later than May 19, 2020 and entered into the U.S. not later than August 17, 2020. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 2019 through December 2019, the most recent three months for which data are available.

Future quotas, in addition to the quantity announced, will be established if price conditions warrant.

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 to overcast conditions prevailed across the lower Southeast throughout the period. Daytime high temperatures varied from the mid-40s to mid-70s. Thunderstorms brought moderate to heavy rain showers to areas across the entire Southeastern region during the week. Weekly accumulated precipitation totals measured from 2 to 4 inches in areas throughout Alabama, the Florida Panhandle, and Georgia, with locally heavier amounts observed in some areas.

Flash flood watches and river flood warnings were issued for areas across north Alabama and north Georgia as rainfall continued to fill rivers  and some creeks spilled over banks. Fieldwork remained at a standstill dueto saturated soils.

Ginning neared completion; some gins remained on gin days as they waited for the last modules to arrive from fields. The Macon Classing Office continued to process samples.

Partly cloudy to overcast conditions were observed across the upper Southeast region during the period. Daytime high temperatures varied from the mid-40s to the low 70s. Thunderstorms brought moderate precipitation throughout the Carolinas and Virginia. Weekly accumulated rainfall totals measured from 2 to 4 inches with heavier accumulations observed in some areas.

River flood warnings were issued in some areas during the week as rainfall filled rivers. Fieldwork activities remained at a standstill due to soggy conditions. Ginning was rapidly nearing completion; some gins remained on gin days as they waited for the last modules to arrive from fields. The Florence Classing Office continued to process samples.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, staple 34 and longer for August through December delivery. No sales were reported. Most mills have covered their raw cotton needs through the summer months. No additional inquiries were reported. Demand for ring-spun and open-end yarn was moderate.

Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted styles of cotton.

Trading

  • Even-running lots containing color 41 and 51, leaf 3 and 4, staple 36 and 37, mike 43-49, strength 29-33, and uniformity 80-83 sold for around 66.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • Mixed lots containing color mostly 41-52, leaf 2-4, staple 34 and longer, mike 43-49, strength 27-32, and uniformity 79-82 sold for around 60.50 cents, same terms as above.
  • A light volume of 2018-crop, color 53 and better, leaf 5 and better, staple 34 and longer, mike 34-49, strength 27-34, and uniformity 79-84 with 25 percent extraneous matter (bark) traded for around 61.00 cents, same terms as above.

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. Producers were carefully watching the market for signals that the Phase One trade agreement with China will move cotton prices higher in the run-up to first notice day for the March ICE futures contract on February 24.

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Overcast skies with frequent rain showers characterized a typical winter weather pattern during the week. Daytime temperatures dropped from the 50s into the 30s as another cold front moved through the region. Low temperatures were in the 20s. Areas that received the heaviest amounts of precipitation reported less than 2 inches of rain. The National Weather Service issued a river flood warning for Shelby County in southwestern Tennessee. Most roads beside the levee were flooded. Saturated fields and standing water hindered any type of field activity.

Ginning was rapidly drawing to close in all areas. Producers and other interested parties made plans to attend regional informational meetings. Local experts reported that cotton acreage for the coming season will probably be about the same as last year.

South Delta

Spot cotton trading was slow. Supplies of available cotton were moderate. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. Producers were closely monitoring the market for indications that the Phase One trade agreement with China will move cotton prices higher in the run-up to first notice day for the March ICE futures contract on February 24.

Cloudy to partly cloudy skies with intermittent rain showers dominated the weather pattern during the week. Daytime temperatures dropped from the 70s to the 50s as another cold front moved through the region. Low temperatures were in the 30s. Most areas reported less than 1 inch of rain, with localized reports of up to 2 inches.

The National Weather Service issued a river flood warning for Franklin Parish, due to recently accumulated precipitation. Saturated soils and standing water in low-lying fields continued to prevent most field activities, including the timely shredding of cotton stalks in a few remaining fields.

A few gins were working on gin days as they struggled to bring in modules from muddy turnrows. According to the U.S. Drought Monitor, abnormal dryness in Louisiana continued to persist in the drier portions of the state. Producers attended local and regional industry meetings while planning for the upcoming planting season.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • A moderate volume of mixed lots, mostly color 42 and better, leaf 4 and better, staple 37 and longer, mike 45-48, strength 27-32, and uniformity 79-83 traded for around 67.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color mostly 51, leaf 5 and better, staple 38 and longer, mike averaging 46.7, strength averaging 30.4, and uniformity averaging 81.4 traded for around 61.50 cents, same terms as above.

Southwestern Markets Regional Summary .

East Texas

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

Fields were irrigated in the Rio Grande Valley. Cotton planting season is nearing, but not all fields have planting moisture. A good general rainfall is needed. Some roads were closed due to high water following heavy thunderstorms in the Blackland Prairies. Fields were wet and all activity was halted. Producers booked cotton planting seed. Fieldwork made good progress in south Texas under sunny conditions. Gins continued to press bales in the Winter Garden area. No cotton planting was reported.

In Kansas, ginning continued with daytime temperature highs in the upper 20s to mid-50s, and overnight lows in the teens to low 30s. Field activity made some progress ahead of a snow storm on February 12. Strip-till was underway for corn and cotton. Fertilizer was applied. In Oklahoma, a storm moved through bringing a light amount of snow and rain. Fieldwork was inactive. Ginning continued. The National Cotton Council held their annual meeting in New Orleans.

West Texas

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

Mild weekend weather was followed with two storm fronts early in the period. Wintry showers included rain, freezing rain, and snow. Winter advisories, watches, and warnings were issued. Daytime highs were in the low 30s to low 60s, and overnight lows were in the teens to mid-30s. All field work was stalled until soggy soils firmed enough to support equipment. Sweetwater received up to 5 inches of snow, according to local reports. The moisture is welcomed and will help alleviate droughty conditions.

Ginning continued. Meetings included the Pesticide Applicators’ Training in Levelland, No-Till Texas Soil Health Symposium in Lubbock, and a Crop Production meeting in Dalhart. Industry members attended the National Cotton Council’s annual meeting in New Orleans.

Trading

East Texas

  • In Texas, an even-running lot containing a light volume of color 31, leaf 3 and 4, staple mostly 35, mike 47-48, strength 30-32, and uniformity 80-81 sold for around 61.50 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a heavy volume of mostly color 31 and 41, leaf 4 and 5, staple 34, mike 30-53, strength 26-33, uniformity 78-82, and 50 percent extraneous matter sold for around 63.25 cents, FOB car/truck (compression charges not paid).
  • In Oklahoma, a moderate volume of color 41 and 42, leaf 4 and 5, staple 34 and 35, mike averaging 50.3, strength averaging 33.2, and uniformity averaging 81.7 sold for around 57.75 cents, same terms as above.
  • A moderate volume of 2019-crop CCC-loan equities traded for 1.25 to 4.25 cents.
  • A light volume of 2018-crop CCC-loan equities traded for 0.00 cents.

West Texas

  • A mixed lot containing a heavy volume of mostly color 31 and 41, leaf 3 to 5, staple 35 and longer, mike 37-47, strength 28-33, uniformity 78-80, and 25 percent extraneous matter sold for around 60.75 cents per pound, FOB car/truck (compression charges not paid).
  • A mixed lot containing a moderate volume of mostly color 31 and 32, leaf 2 and 3, staple 33 and longer, mike 34-52, strength 27-36, uniformity 78-83, and 25 percent extraneous matter sold for around 59.00 cents, same terms as above.
  • A moderate volume of color 32, leaf 2 and 3, staple 32 and longer, mike 40-53, strength 26-32, and uniformity 76-81 sold for around 56.50 cents, same terms as above.
  • A light volume of 2019-crop CCC-loan equities traded for 6.50 to 10.75 cents.
  • A light volume of 2018-crop CCC-loan equities traded for 1.75 to 2.75 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Shippers limited foreign travel due to coronavirus concerns. Shippers are cautiously optimistic and expect to see a rebound as mills re-open after the Chinese New Year and interruption caused by the coronavirus.

On Monday, February 10, a light volume of 2018-crop New Mexico CCC-Catalog was opened for bids. Bidding will close on Wednesday, February 19. Foreign mill inquiries were light.

Sunny and warm conditions were the norm for central Arizona. Temperatures were in the mid-60s to low 70s. Rainfall was received mid-week. From Yuma to Phoenix, precipitation totals were one-quarter of an inch up to three-quarters of an inch. Minor flooding was reported in Yuma. Snowfall was reported in higher elevations of Safford. Fieldwork was delayed. No planting was reported in Yuma.

Ginning continued. One Arizona gin will not operate in the 2020 season. Temperatures dropped from the low 70s into the low 50s as wintry conditions, with a mix of rain, hail, and snow moved into southern New Mexico and El Paso, TX mid-week. The Visalia Classing Office reduced to one shift on Monday, February 10.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Shippers limited foreign travel due to coronavirus concerns. Shippers are cautiously optimistic and expect to see a rebound as mills re-open after the Chinese New Year and interruption caused by the coronavirus.

Temperatures were in the mid-60s for most of the week. The daytime high temperature of 70 degrees was reached on Thursday, February 13. Conditions remained dry. The Valley could use a good general rainfall. The California Department of Water Resources reported the statewide snowpack at 59 percent of average as of February 12.

The snowpack water equivalent was reported at 12.10 inches, slightly lower than the previous month. Compared to this same time last year, the statewide water content was 26.40 inches. Fieldwork was active. The World Ag Expo in Tulare, CA ended it’s 3-day run on February 13. The Visalia Classing Office reduced to one shift on Monday, February 10.

American Pima (AP)

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

Shippers limited foreign travel due to coronavirus concerns. Shippers are cautiously optimistic and expect to see a rebound as mills re-open after the Chinese New Year and interruption caused by the coronavirus. The Pima Competitiveness Payment entered the second payment week, as offering prices remained firm for all ELS growths.

Temperatures dropped into the low 50s and 60s in the Desert Southwest region as a cold front brought rain, hail, and snow mid-week. This storm provided beneficial moisture for top and subsoil. Minor flooding was reported in Yuma, AZ. No planting was reported. Temperatures were mild in California, with a daytime high reaching 70 degrees late in the period. Conditions remained dry.

The San Joaquin Valley could use a good general rainfall. The California Department of Water Resources reported the statewide snowpack at 59 percent of average as of February 12. The snowpack water equivalent was reported at 12.10 inches, slightly lower than the previous month. Fieldwork continued. Ginning continued uninterrupted.

The World Ag Expo in Tulare, CA ended it’s 3-day run on February 13. The Visalia Classing Office reduced to one shift on Monday, February 10.

Trading

Desert Southwest

  • A light volume of color 21 and 31, leaf 3 and better, and staple 35 and longer sold for around 65.50 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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