Weekly Cotton Market Review – USDA

    Photo: Nick McMichen

    Average spot quotations were 167 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 51.42 cents per pound for the week ending Thursday, April 30, 2020.

    The weekly average was up from 49.75 last week, but down from 71.23 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 50.22 cents Monday, April 27 to a high of 52.62 cents Thursday, April 30.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 30 totaled 27,359 bales. This compares to 18,459 reported last week and 32,665 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,453,565 bales compared to 1,141,115 bales the corresponding week a year ago. The ICE July settlement price ended the week at 57.33 cents, compared to 56.37 cents last week.

    Southeastern Markets Regional Summary

    Spot cotton trading was inactive. Supplies and producer offerings were moderate. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains.

    Mostly sunny to fair conditions prevailed across the lower Southeastern region over the weekend and early in the week. Daytime high temperatures were in the mid-70s to mid-80s. Light scattered shower activity was received in localized areas early in the period. Later in the week, a line of widespread thundershowers brought moderate to heavy moisture to areas from the Gulf Coast throughout Alabama and Georgia.

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    Weekly accumulated rainfall totals measured from 1 to 2 inches, with heavier accumulations in excess of 4 inches observed in portions of south Alabama and southwest Georgia. River flood warnings remained in effect in some areas.

    In Alabama, planting progressed at a slow pace in the southern part of the state, but wet conditions delayed fieldwork.

    In Florida, producers planned to begin planting in earnest once they finish with competing crops.

    In Georgia, planting advanced between rain events, but was delayed by wet conditions. Heavy rainfall in recent weeks caused flooding and damaged crops; some cotton may need to be replanted in eastern parts of the state.

    Producers across the lower Southeastern region were waiting for soft soils to firm before re-entering fields. A mix of sunny to mostly cloudy conditions were observed across the upper Southeastern region during the period. Daytime high conditions were in the low 70s to low 80s. Widespread thunderstorms brought light moisture to the Carolinas and Virginia over the weekend and again late week. Weekly accumulated precipitation totals measured from trace amounts to around 1 inch of rainfall.

    Cotton planting was just getting underway in areas where fields were firm enough to support equipment. Producers applied fertilizer, lime, and burndowns. Some low-lying areas remained soggy where the heaviest rainfall was received in recent weeks.

    Textile Mill

    Inquiries from domestic mill buyers were very light. No sales were reported. The undertone from mill buyers remained very cautious as they continued to delay or reschedule deliveries of raw cotton, due to closures or reduced schedules associated with the COVID-19 Pandemic.

    Some mills planned to remain closed through early May; others are gradually phasing in operations on a limited basis as supported by finished product orders. Most production centered on personal protective equipment for frontline workers and military supplies in response to the COVID-19 Pandemic.

    The National Council of Textile Organizations, representing the full spectrum of U.S. textiles from fiber through finished sewn products, issued a statement April 28 with textile executives backing the July 1 implementation of the U.S.-Mexico-Canada Agreement (USMCA).

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

    Trading

    • No trading activity was reported.

    South Central Markets Regional Summary

    North Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was moderate. No forward contracting was reported. Commodity prices improved slightly, but the COVID-19 Pandemic continues to negatively impact financial markets and manufacturing supply chains around the world.

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    A mix of cloudy to partly sunny weather prevailed during most of the period. A cold front brought thunderstorms and very strong winds to the region late week. Damage to trees and power lines occurred in some places. Accumulated rainfall of up to 2 inches was reported in a few areas. Daytime temperatures were mostly in the 60s and 70s. Overnight lows in the 40s and 50s were unseasonably cool for this time of the season.

    Fieldwork and planting were delayed due to unfavorably low soil temperatures and saturated soils. A few rural areas reported power outages due to recent severe weather. River flood warnings issued by the National Weather Service remained in effect for numerous river watersheds. Portions of some low-lying fields remained submerged throughout the region, which was causing some concern to landowners as planting time approaches.

    According to the National Agricultural Statistics Service’s Crop Progress report released on April 27, cotton planting was underway with 3 percent completed in Arkansas and 2 percent in Tennessee. No planting was reported in Missouri.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was slow. No forward contracting was reported. Commodity prices increased slightly, but the COVID-19 Pandemic continues to disrupt manufacturing supply chains around the world.

    Mostly clear skies prevailed during most of the week. However, heavy thunderstorms late in the period brought up to 3 inches of precipitation to some areas, while around 2 inches were reported in most locations. Daytime temperatures were in the 70s, with lows in the 50s. River flood warnings issued by the National Weather Service remained in effect for numerous locations throughout the region.

    Producers with low-lying fields along streams and rivers were concerned that flooding could prevent planting in those areas. Field activities were delayed due to soft, cold soils in some places. Planting continued in fields that were firm enough to support equipment and where soil temperatures were warm enough for proper germination.

    According to the National Agricultural Statistics Service’s Crop Progress report released on April 27, cotton planting advanced slowly to 7 percent completed in Louisiana and 6 percent in Mississippi. Both figures were slightly behind the five-year average, mainly due to cold, wet soil conditions.

    Trading

    North Delta

    • A moderate volume of CCC-loan equities traded for around 3.00 to 4.00 cents per pound.

    South Delta

    • A light volume of CCC-loan equities traded for around 3.00 cents per pound.

    Southwestern Markets Regional Summary .

    East Texas

    Spot cotton trading was active. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was moderate. Foreign inquiries were light. Inquiries were best from China, Taiwan, and Thailand. Producers took advantage of higher ICE futures prices during the period to forward contract and fix prices on a moderate amount of 2020-crop cotton. Communities developed plans to restart businesses despite an increase in novel Coronavirus confirmed cases throughout the region.

    Beneficial rainfall helped stands thrive in the Upper Coast and in south Texas. Unfortunately, the droughty areas of the Rio Grande Valley did not receive any precipitation. Irrigation water was applied and the crop began to square. Some blooms were reported. Severe storms brought high winds and hail in the northern Blackland Prairies (BP). Power outages were reported along with downed trees and other property damages.

    Planting continued in the southern BP and stands had emerged in the Brazos River bottoms. Planting had begun in Oklahoma, but most producers waited for a planting rain. Sowing seed was expected to begin in a few days in Kansas; while other producers were waiting until May 10 for any cold fronts to pass. Seed was delivered.

    West Texas

    Spot cotton trading was active. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was slow. Foreign inquiries were light. Interest was best from China, Taiwan, and Thailand. Local governments held press conferences to announce the limited reopening of some local businesses. The strict stay at home orders expired on April 30 for some locations.

    Fieldwork made progress under warm, sunny conditions with daytime temperature highs in the mid-70s to low 100s, and overnight lows in the 40s to 60s. Intermittent rainfall brought beneficial precipitation to a few locations early in the period, but drier conditions prevailed. A good planting rain is needed.

    Most agricultural retailers and service companies stayed open to support producers and prepare for the planting season. Associations have employed different platforms to conduct group meetings and trainings. The industry continues to stay connected and moving forward during the COVID-19 Pandemic.

    Trading

    East Texas

    • In Texas, a heavy volume of mostly color 31 and better, leaf 2 and 3, staple 36 and longer, mike 35-49, strength 29-34, and uniformity 80-84 sold for around 54.50 cents per pound, FOB warehouse (compression charges not paid).
    • A heavy volume of color 42 and better, leaf 4 and better, staple 33 and 34, mike 34-50, strength 25-33, and uniformity 78-82 sold for 48.50 to 50.00 cents, same terms as above.
    • In Kansas, a heavy volume of mostly color 31 and 41, leaf 4, staple 36 and longer, mike 35-49, strength 28-35, uniformity 76-82, and 100 percent extraneous matter sold for around 50.25 cents, FOB car/truck (compression charges not paid).
    • A heavy volume of 2019 CCC-loan equities traded for 3.50 cents.

    West Texas

    • A moderate volume containing mostly color 31 and 41, leaf 4, staple 36 and longer, mike 35-48, strength 28-35, uniformity 79-83, and 100 percent extraneous matter sold for around 51.50 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume of cotton mostly color 21, leaf 1, staple 34, mike averaging 45.7, strength averaging 29.7, and uniformity averaging 78.7 sold for around 49.00 cents, same terms as above.
    • A light volume of 2019 CCC-loan equities traded for 0.50 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies were moderate. Demand was light. The COVID-19 Pandemic continues to affect the marketing chain for cotton. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

    The crop made excellent progress in Yuma, AZ. Planting continued throughout the DSW. Local sources reported early planted cotton was up and made good progress. Although New Mexico and El Paso, TX has plenty of irrigation water available for the 2020-crop season, water managers are preparing for droughty conditions because below-average runoff was expected as the 2019 water season was drier.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. The COVID-19 Pandemic continued to impact U.S. and global economies. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

    Planting was nearly completed. Seedlings were up and thriving under ideal weather conditions. The initial water allocation stands at 15 percent of their contracted supply for south of the Delta agricultural users. There is a chance that allocations could increase in May, due to late snow and rains in early April; but too late for cotton planting decisions.

    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. The COVID-19 Pandemic continues to affect demand for cotton. Foreign mill inquiries were light.

    Sunny, warm conditions advanced planting throughout the Far West. Emergence was good in the San Joaquin Valley of California and the young plants made good progress. In early-planted El Paso, TX fields, seedlings were up to a good stand.

    Trading

    Desert Southwest

    • No trading activity was reported.

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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