Weekly Cotton Market Review – USDA

Photo: Blair Fannin, Texas AgriLife Extension

Average spot quotations were 278 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 52.80 cents per pound for the week ending Thursday, May 14, 2020.

The weekly average was up from 50.02 last week, but down from 61.23 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 51.63 cents Friday, May 8 to a high of 53.91 cents Tuesday, May 12.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 14 totaled 21,979 bales. This compares to 5,311 reported last week and 1,905 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,480,855 bales compared to 1,164,230 bales the corresponding week a year ago. The ICE July settlement price ended the week at 57.85 cents, compared to 55.39 cents last week.

Southeastern Markets Regional Summary

Spot cotton trading was slow. 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.

Ideal weather conditions prevailed across Alabama, the Florida Panhandle, and Georgia during the period. Mostly dry, sunny to partly cloudy conditions dominated the weather pattern. Daytime high temperatures varied from the upper 60s to mid-80s. Isolated storms brought trace amounts to around one-half of an inch of precipitation to areas of north Alabama and north Georgia.

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Planting advanced at a rapid pace, but was delayed by unseasonably cool temperatures in some areas. Warm temperatures enhanced seedling vigor in the earliest-planted fields. However, seed germination was sluggish in some areas due to cooler temperatures. Producers scouted fields and applied sprays where pest populations met threshold levels. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released May 11, cotton planting had reached 41 percent completed in Alabama and 26 percent completed in Georgia.

Fair to cloudy conditions were observed across the upper Southeastern region during most of the period. Daytime high temperatures varied from the upper 60s to upper 80s. Planting advanced in South Carolina and progressed at a slower pace in North Carolina and Virginia. Rainfall and cooler temperatures early in the period delayed sowing activities in some areas.

Mostly dry and warm conditions over the weekend should allow fieldwork to advance ahead of thunderstorms in the nearby forecast. According to the NASS Crop Progress report released May 11, cotton planting had reached 23 percent completed in South Carolina, 14 in Virginia, and 7 percent completed in North Carolina.

Textile Mill

Mill buyers made initial inquiries for 2020-crop cotton, color 41, leaf 3, and staple 37 for fourth quarter delivery. No sales were reported. Additional inquiries were very light. The undertone from mill buyers remained very cautious, due to closures or reduced schedules associated with the COVID-19 virus. Mills are planning incremental increases in production 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.

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

Trading

  • A heavy volume mixed lot of 2019-crop cotton containing color mostly 31 and 41, leaf 3-5, staple mostly 36 and longer, mike 43-49, strength 28-31, and uniformity 81-83 sold for around 59.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A light volume of color mostly 41 and 51, leaf 4, staple 35 and 36, mike 43-49, strength 29-31, and uniformity 79-81 was offered for sale. Bids for around 275 points off ICE July futures, same terms as above, were rejected by sellers.
  • A moderate volume mixed lot of color mostly 51, leaf 4 and better, staple 34-36, mike 37-50, strength 27-30, and uniformity 78-81 was offered for sale. Bids for around 675 points off ICE July futures, same terms as above, were rejected by sellers.

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 slow. No forward contracting was reported. Commodity prices moved higher, but the COVID-19 Pandemic continues to negatively impact financial markets and manufacturing supply chains around the world.

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Overcast skies with intermittent rain showers prevailed during most of the period. Accumulated rainfall of less than 1 inch was reported in a few areas. Daytime temperatures were mostly in the 60s to 80s. Overnight lows were in the 40s to 60s. Fieldwork advanced in places where soils were firm enough to support equipment, but planting was hampered by wet and cold soil conditions and advanced slowly in most places.

Producers and local experts reported that cotton struggled to germinate, due to frequent rain showers and low soil temperatures. Cotton extension specialists advised producers to carefully monitor seeding rates to insure adequate stands when planting under less than ideal conditions, which included the slow accumulation of heat units after sowing.

River flood warnings issued by the National Weather Service remained in effect for numerous river watersheds. According to the National Agricultural Statistics Service’s Crop Progress report released on May 11, cotton planting was at 26 percent completed in Arkansas and 10 percent in both Missouri and Tennessee. All of these figures were well behind the five-year average.

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 moved higher during the week, but the COVID-19 Pandemic continues to disrupt manufacturing supply chains around the world.

Mostly clear skies prevailed during the week. Daytime temperatures reached into the 80s. Cool overnight temperatures in the 40s early in the period rose into the 50s late week. Scattered showers brought less than 1 inch of rain to isolated areas. Planting expanded at a normal pace in most areas throughout Louisiana. Some early-planted fields struggled to get up to a stand and most were being treated for thrips.

River flood warnings issued by the National Weather Service remained in effect for numerous locations throughout the region. According to the National Agricultural Statistics Service’s Crop Progress report released on May 11, cotton planting advanced to 54 percent completed in Louisiana. Progress was good in Mississippi, at 23 percent planted, but that figure remained about one week behind the five-year average.

Trading

North Delta

  • A light volume of CCC-loan equities traded for 2.00 cents per pound.

South Delta

  • A light volume of CCC-loan equities traded for 2.00 cents per pound.

Southwestern Markets Regional Summary .

East Texas

Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Inquiries were best from China, Taiwan, and Turkey. Communities developed plans to restart businesses.

Stands in the Upper Coast advanced and established a foundation for a good boll load. Producers were encouraged. In the Coastal Bend, the stands progressed to squaring. Some acreage failed under the crop insurance guidelines. Dry conditions prevailed although some rainfall was received in intermittent locations. Stands were blooming in the Rio Grande Valley and irrigation was applied.

Pests were monitored and insecticides were applied as needed. Planting was completed on many farms in the Blackland Prairies. Some fields were replanted. Acreage planted varied, but some reported the same as last year or more. Frequent rainfall during the spring interfered with corn acreage sowing, which caused some of those acres to be planted to cotton.

In Kansas, cotton planting was at 18 percent, 5 points ahead of last year and 3 points ahead of the five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on May 11. High winds and overnight low temperatures in the 30s caused seedling damage and replanting was underway.

Planting was initiated in Oklahoma with daytime temperature highs in the upper 60s to low 90 and overnight lows in the upper 40s to upper 60s. Acres planted had reached 7 percent, down 1 point from the previous year and down 9 points from the five-year average, according to NASS. Beneficial rainfall was received late in the period that will help boost germination. Stands had emerged in irrigated fields. Insects were monitored.

West Texas

Spot cotton trading was moderate. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Interest was best from China, Taiwan, and Turkey. Local governments held press conferences to announce the reopening of local businesses.

Planting continued to make progress and some producers were finished. Fields planted in dry conditions received a good planting rain on May 11 to spur seed germination. Several bands of storms swept across the region and brought up to one and one-half inches of beneficial precipitation. Some fields received small and large sized hail stones. A few stands had emerged, and some suffered from sand blasting and were expected to be replanted. Irrigation was underway if needed.

Trading

East Texas

  • In Texas, a light volume of mostly color 31 and better, leaf 5 and better, staple 32 and longer, mike 39-48, strength 25-33, uniformity 76-81, and 25 percent extraneous matter sold for around 46.75 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a moderate volume of mostly color 41 and better, leaf 3 and better, staple 35, mike 50-52, strength 28-34, and uniformity 79-82 sold for around 52.25 cents, FOB car/truck (compression charges not paid).
  • In Oklahoma, a light volume of mostly color 41, leaf 3, staple 34, mike averaging 48.2, strength averaging 31.6, and uniformity averaging 80.7 sold for around 48.00 cents, same terms as above.

West Texas

  • A light volume containing mostly color 11 and 21, leaf 1 and 2, staple 36 and longer, mike 40-49, strength 30-35, and uniformity 78-81 sold for around 56.50 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 22 and 32, leaf 2 and 3, staple 35 and 36, mike 39-45, strength 29-33, and uniformity 78-81 sold for around 52.00 cents, same terms as above.
  • A light volume of 2019 CCC-loan equities traded for 6.75 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. A light volume of producer cotton was offered, but no sales were reported. Average local spot prices were higher. The effects of the COVID-19 Pandemic continues to disrupt the marketing chain for cotton. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Triple-digit temperatures were the norm in Arizona. No precipitation was recorded. Hot, dry conditions advanced the crop. The crop in Yuma made good progress. Insect activity picked up in central Arizona and producers sprayed for thrips. Planting was virtually completed in New Mexico and El Paso, TX. Cotton was up and made good progress. Insect activity was light. Local sources reported beans were planted in some New Mexico fields instead of cotton.

San Joaquin Valley (SJV)

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

Temperatures in the Valley ranged from the high 70s to high 90s. A low-pressure system mid-week brought cloudy conditions and lower temperatures, but no rainfall to the central and southern SJV. Young cotton stands continued to make good progress.

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.

Temperatures were in the low 100s in Arizona and the 70s and 80s in California, New Mexico, and El Paso, TX. Planting neared completion in the Far West. Young plants were healthy and thriving. No insect pressures were reported.

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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