Average spot quotations were slightly over three and one-halp cents 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 52.58 cents per pound for the week ending Thursday, March 19, 2020. This is the lowest weekly average since week ending September 3, 2009 when the average was 52.18.
The weekly average was down from 56.15 last week and 70.28 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 55.31 cents Friday, March 13 to a season low of 49.75 cents Thursday, March 19.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 19 totaled 18,593 bales. This compares to 17,289 reported last week and 70,736 spot transactions reported the corresponding week a year ago.
Total spot transactions for the season were 1,374,070 bales compared to 912,887 bales the corresponding week a year ago. The ICE May settlement price ended the week at 54.93 cents, compared to 59.70 cents last week.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #22 FOR UPLAND COTTON March 19, 2020
The Department of Agriculture’s Commodity Credit Corporation 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 March 26, 2020, allowing importation of 11,243,064 kilograms (51,638 bales of 480-lbs) of upland cotton.
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Quota number 22 will be established as of March 26, 2020 and will apply to upland cotton purchased not later than June 23, 2020 and entered into the U.S. not later than September 21, 2020. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period November 2019 through January 2020, 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 inactive. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.
A mix of cloudy to clear conditions, with scattered shower activity, prevailed across the lower Southeastern region during the period. Seasonably warmer daytime high temperatures varied from the low 70s to mid-80s. Thundershowers brought moderate-to-heavy moisture to portions of northwest Alabama over the weekend.
Precipitation totals measured from 1 to 3 inches. Elsewhere, in northeast and north-central Alabama, weekly accumulated rainfall measurements totaled from one-quarter of an inch to one inch of moisture. Areas of north Georgia received around one-half of an inch to one inch of weekly accumulated moisture, and elsewhere throughout the state weekly rainfall totals measured from trace amounts to around one-quarter of an inch of moisture.
Mostly dry conditions were observed across much of south Alabama and cotton growing areas of the Florida Panhandle. Abnormally dry conditions expanded in coastal Alabama areas and the extreme western Florida Panhandle, according to the U.S. Drought Monitor. Fieldwork and outside activities were underway in areas where soils were firm enough to support equipment. Producers conducted routine maintenance on machinery and considered spring planting options.
Mostly cloudy conditions prevailed throughout the upper Southeastern region with light, intermittent shower activity observed in most areas throughout the period. Daytime high temperatures fluctuated from the low 80s entering the period, down into the high 50s, and back into the mid-80s late week. Thundershowers brought moderately heavy rainfall to areas of the Pee Dee river basin early in the week; precipitation totals measured from around three-quarters of an inch to one inch of moisture.
Elsewhere throughout the Carolinas and Virginia, weekly accumulated precipitation totals measured from trace amounts to around one-half of an inch of rainfall across widespread areas. Fieldwork and other activities continued in areas where dry conditions prevailed; producers applied burndown sprays and prepared fields for spring plantings.
Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 for October through December 2020 delivery. No sales were reported. Most mill buyers have covered their immediate-to-nearby raw cotton needs. No additional inquiries were reported.
The undertone from mill buyers was very cautious as they expected a significant downturn in demand during the next quarter due to interruptions associated with the COVID-19 virus. Yarn demand was light-to moderate, but had diminished due to faltering end-user demand. Reports indicated some mill buyers had delayed deliveries of raw cotton to manage building inventories.
Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted or low-grade styles of cotton.
- No trading activity was reported
South Central Markets Regional Summary
Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Foreign inquiries were light. Interest was best from Bangladesh, China, Egypt, and Pakistan. Cotton prices remained on the decline as the COVID-19 virus added to market woes.
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Rain along with cooler temperatures entered the territory during the period. Daytime temperatures were erratic, ranging from the mid-40s to the low 70s. Overnight lows were in the 40s and 50s. Rainfall accumulations in the territory ranged from 1 to 2 inches. River flood warnings were in effect. Producers are contemplating planting decisions due to current weather and economic conditions. Sources predict that planting acreage will decrease this crop year.
Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Financial markets and economic activity in all sectors struggled to find positive news as a result of the worldwide effects of the COVID-19 virus.
Warm temperatures continued in the territory with daytime highs in the 70s and 80s. Low temperatures were in the 50s and 60s. River flood warnings were issued throughout the region. Field activities were underway as soils began to dry enough to support equipment. Producers were facing uncertain planting decisions due to the wet conditions and economic pressures. Sources predict a downturn in planted cotton acreage this season.
- A light volume mixed lot containing color mostly 63 and better, leaf 8, staple 35 and longer, mike 40-49, strength 26-31, and uniformity 80-82 traded for 15.00 to 20.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
- No trading activity was reported.
Southwestern Markets Regional Summary
Spot cotton trading was slow. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light. An open invitation to bid on a heavy volume of 2019-crop CCC-catalog cotton will close on March 23. Concerns over the coronavirus continued to pressure the market, and confirmed cases increased in the United States.
Planting was active in the Rio Grande Valley and South Texas. Most parts of the region were in need of wet weather to fortify sub-soil moisture levels and enhance early plant development. Fields were saturated in the Blackland Prairies and all field activities were stalled. In Kansas, one gin continued pressing operations. Daytime temperature highs were in the low 40s to low 70s, and overnight temperature lows were in the upper 20s to mid-30s.
Fields were soggy from recent rainfall. Snowfall is in the nearby forecast. In Oklahoma, several meetings and trainings have been cancelled to limit the spread of COVID-19. Ginning was mostly completed. A couple of storm fronts moved through and brought beneficial moisture ahead of planting. Fields were wet and fieldwork was halted for the period.
Spot cotton trading was moderate. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. An open invitation to bid on a heavy volume of 2019-crop CCC-catalog cotton was opened on March 17. Concerns over the coronavirus continued to pressure the market.
Beneficial rainfall was received with daytime temperature highs in the low 50s to mid-70s, and overnight lows in the low 30s to mid-50s. Fog, rain, and thunderstorms were prevalent. Some areas received golf ball sized hail. Fields are in good condition ahead of planting. Fieldwork was stalled until fields firmed. All gins have finalized the season.
The annual Cotton Trade Show scheduled for April 2 and 3 has been cancelled along with other regional and annual meetings. Most industry offices are opened for business, but closed doors to visitors to help prevent the spread of the coronavirus.
- In Texas, a light volume of mostly color 32, leaf 3, staple 35, mike 35-53, strength 27-37, and uniformity 77-83 sold for around 54.25 cents per pound, FOB car/truck (compression charges not paid).
- In Kansas, a moderate volume of mostly color 32, leaf 4, staple 35, mike 33-52, strength 28-33, uniformity 78-82, and 50 percent extraneous matter sold for around 55.00 cents, same terms as above.
- A heavy volume of mostly color 22, leaf 2, staple 35, mike 35-49, strength 27-33, and uniformity 78-82 sold for around 56.50 cents per pound, FOB car/truck (compression charges not paid).
- A heavy volume of mostly color 22 and 32, leaf 4, staple 35, mike 35-52, strength 27-35, uniformity 77-82, and 25 percent extraneous matter sold for around 55.00 cents, same terms as above.
- .A heavy volume of mostly color 32, leaf 4, staple 35, mike 33-52, strength 27-34, uniformity 77-82, and 25 percent extraneous matter sold for around 54.75 cents, same terms as above.
Western Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were sharply lower. No forward contracting or domestic mill activity was reported. Instability in the stock and commodity markets continued as the U.S. attempts to contain the COVID-19 virus. Foreign mill inquiries were light.
High temperatures were in the low 70s to mid-80s in Arizona. Thunderstorms moved into the state late in the period. Precipitation amounts were just over 2 inches in Yuma and neared 1 inch in central Arizona. Flash flood was a concern in Yuma. Planting activities halted in Yuma, as cooler temperatures and rainfall delayed planting.
Sources estimated approximately 60 percent of the crop was planted. Local sources anticipate a decline in planted acreage than previously estimated. Field preparations advanced in New Mexico and El Paso, TX. Producers were concerned about prices for all commodities, as alternative row crop prices were not better situated. Adequate irrigation water supplies were available, but sources reported no clear indication of approximate plantings.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were sharply lower. No forward contracting or domestic mill activity was reported. Uncertainty reigns, as the U.S. attempts to contain the COVID-19 virus, volatility in the stock and commodity markets continued. Foreign mill inquiries were light.
Typical spring weather entered the area with varying temperatures. Daytime high temperatures were in the high 50s and low 60s, which is below average for this time of year. A good soaking rainfall was beneficial and welcomed mid-week. Precipitation amounts ranged from one-half of an inch to one and one-quarter of an inch throughout the Valley. More moisture is forecasted for the weekend.
Since October 1, 2019, the start of the water season, Bakersfield has received just over 4 inches of rainfall, which is well below the seasonal average. Fresno recorded four and three-quarters of an inch for the season, which is not quite half of the average. The Sierra Nevada Mountain snowpack received up to 3 feet of fresh snow. No planting was reported as soil temperatures were less than optimal. Uncertain times and falling commodity prices put a damper on new crop plantings. Sources estimated a decrease of 25 to 30 percent.
American Pima (AP)
Spot cotton trading was inactive. Supplies of 2019-crop cotton were moderate. Demand was light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Concerns and fears of the COVID-19 virus continued to pressure U.S. stock and commodity markets. Foreign mill inquiries were light. Merchants were hopeful for China to re-enter the buyers’ market.
Daytime high temperatures were in the low 60s to mid-80s in the Far West. Rain is a welcomed visitor for the region. Rainfall amounts ranged from one-half of an inch up to two inches. Ginning was completed in the San Joaquin Valley. Planting stopped in Yuma, AZ due to cooler temperatures and wet weather. Producers were preparing fields for planting in Arizona, New Mexico, and El Paso, TX.
Sources reported the El Paso, TX area would see an increase in plantings as irrigation water is available. In California, sources reported a possible 30 percent decline in planted acreage. Producers were troubled by limited water supplies, weak prices, and few alternatives.
- No trading activity was reported.
San Joaquin Valley
- No trading activity was reported.
- No trading activity was reported.