Average spot quotations were 37 points 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 53.51 cents per pound for the week ending Thursday, May 28, 2020.
The weekly average was down from 53.88 last week, and 63.56 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 53.91 cents Wednesday, May 27 to a low of 53.14 cents Thursday, May 28.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 28 totaled 13,916 bales. This compares to 7,312 reported last week and 8,237 spottransactions reported the corresponding week a year ago.
Total spot transactions for the season were 1,502,083 bales compared to 1,185,338 bales the corresponding week a year ago. The ICE July settlement price ended the week at 57.57 cents, compared to 58.06 cents last week.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #6 FOR UPLAND COTTON May 28, 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 February 6, 2020, allowing importation of 12,240,623 kilograms (56,220 bales) of upland cotton.
More on Cotton
Quota number 15 will be established as of February 6, 2020 and will apply to upland cotton purchased not later than May 5, 2020 and entered into the U.S. not later than August 3, 2020. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period September 2019 through November 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 light. Average local spot prices were weak. 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.
A mix of sunny to rainy and overcast conditions were observed during the period across the lower Southeastern region. Daytime high temperatures varied from the low 70s to low 90s. Intermittent rain events brought moisture to areas throughout Alabama, the Florida Panhandle, and Georgia. Weekly accumulated precipitation totals measured from one-half of an inch to four inches, with locally heavier totals observed in some areas.
Planting advanced at a rapid pace as dry conditions allowed, but fieldwork was delayed in portions of Alabama and Georgia where the heaviest rainfall occurred. Seedlings were emerging and a period of warm and dry conditions would be welcome to advance the crop. In Alabama and Florida, producers treated fields for infestations of grasshoppers.
Thrips were also present at treatable levels in some fields across the region. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released May 26, cotton planting had reached 79 percent completed in Alabama and 57 percent completed in Georgia.
Tropical storm Bertha made landfall along the South Carolina coast early Wednesday, May 27 and quickly weakened into a tropical depression as it tracked northward through North Carolina and Virginia. Weekly accumulated precipitation totals measured from 1 to 5 inches along the coastal Carolinas and central North Carolina. River flood warnings were issued in some areas.
Planting and fieldwork continued during the period, but has been delayed by consistent downpours across the upper Southeastern region. Planters will remain idle in many locales until soils are firm enough to support equipment. In some areas, producers are considering replanting options as seedlings failed to make a stand due to heavy rainfall. According to the NASS Crop Progress report released May 26, cotton planting had reached 57 percent completed in Virginia, 56 in South Carolina, and 46 percent completed in North Carolina.
Buyers for domestic mills inquired for a light volume of 2020-crop cotton, color 41, leaf 3, and staple 37 for November/December delivery. No sales were reported. No additional inquiries were reported. The undertone from mill buyers remained very cautious, due to closures or reduced schedules associated with the COVID-19 virus.
Most mills continue to operate at minimal capacity, but cotton deliveries scheduled at some locales the first and second week of June signaled a slight uptick in production. Mills continued to produce personal protective equipment for frontline workers and military supplies in response to the COVID-19 Pandemic.
Demand through export channels was light-to-moderate. Chinese mill buyers inquired for a moderate volume of 2020-crop cotton, no sales were booked.
- A moderate volume of color mostly 31 and 41, leaf 3 and 4, staple 38 and 39, mike 37-49, strength 29-31, and uniformity 81-83 sold for around 50 points on ICE July futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
- A moderate volume of color mostly 21 and 31, leaf 2-4, staple 37 and 38, mike 43-49, strength 28-30, and uniformity 80-83 sold for around 61.00 cents per pound, same terms as above.
- A moderate volume of color mostly 41, leaf 3 and 4, staple 37 and 38, mike 43-49, strength 29-31, and uniformity 81-82 sold for around 55.00 cents, same terms as above.
- A moderate volume even-running lot containing color mostly 41 and 51, leaf mostly 4 and 5, staple 38, mike 37-49, strength 29-31, and uniformity 81-83 sold for around 52.25 cents, same terms as above.
South Central Markets Regional Summary
Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were weak. Trading of CCC-loan equities was slow. No forward contracting was reported. Commodity prices struggled to gain much ground as the COVID-19 Pandemic continues to negatively impact financial markets and manufacturing supply chains around the world.
AgFax Weed Solutions
Severe weather struck the region early in the week. Downed trees and limbs caused power outages in many areas. Some structural damage to homes and businesses was also reported. Partly cloudy and warm weather prevailed during the remainder of the week. Frequent thunderstorms brought approximately 1 inch of precipitation to the region. Daytime temperatures were mostly in the upper 80s. Overnight lows were in the 60s. Fieldwork advanced slowly in Missouri, due to wet and cold soil conditions.
Producers were considering their options under the rules for prevented planting, which included planting beyond insurance cut-off dates, planting a different crop, or planting a cover crop. According to the National Agricultural Statistics Service’s Crop Progress report released on May 26, cotton planting was at 72 percent completed in Arkansas, 30 in Missouri, and 47 percent in Tennessee, all of which were behind the five-year average.
Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were weak. Trading of CCC-loan equities was inactive. No forward contracting was reported. Commodity prices fluctuated during the week as the COVID-19 Pandemic continues to disrupt manufacturing supply chains around the world.
Cloudy to partly clear skies prevailed during the week. Daytime temperatures were in the 80s. Warmer overnight temperatures were in the 60s. Scattered showers brought up to 2 inches of precipitation, while heavier amounts were received in isolated areas. Planting continued at a steady pace in most areas throughout Louisiana, but lagged in Mississippi, in part due to thunderstorms.
Some fields that were too wet to support equipment received aerial applications of chemicals to control thrips and other insect pests. According to the National Agricultural Statistics Service’s Crop Progress report released on May 26, cotton planting advanced normally to 83 percent in Louisiana and 72 percent planted in Mississippi.
- A moderate volume of CCC-loan equities traded for 2.00 to 4.00 cents per pound.
- No trading activity was reported.
Southwestern Markets Regional Summary
Spot cotton trading was light. Supplies and producer offerings were moderate. Demand was light. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. New-crop interest was best from China. The COVID-19 Pandemic continued to put pressure on commodity markets.
Temperatures were in the high 80s to mid-90s in the Rio Grande Valley (RGV). Strong thunderstorms produced heavy rains, lighting, and hail. Precipitation amounts ranged from one-third of an inch up to one and one-quarters of an inch. Local RGV sources reported the irrigated crop looked good. Dryland cotton plants received beneficial rains, the prospect was improved, but maybe too little too late as some fields reached cutout. A few fields were zeroed out for insurance early in the period, prior to recent rain events. The crop continued to bloom, while boll-setting was reported.
In the Blackland Prairies, Coastal Bend, and Upper Coast damaging weather was received late in the period. Thunderstorms produced strong winds, hail, and heavy rains. Rainfall amounts ranged from one and one-half inches up to two inches. Flooding was reported in low-lying areas. Strong winds toppled trees.
Temperatures were in the 70s to low 80s in Kansas. Rainfall was received across the state. Around one-half of an inch to one inch of beneficial moisture was received in western Kansas. Approximately three-quarters of an inch to two and one-quarter inches was received in central to eastern Kansas; respectively. Planting was completed in western Kansas.
In central and eastern Kansas, soil temperatures were not suitable as back to back rain events slowed planting. Local sources estimated around 35 to 50 percent of the crop was planted. Some fields were too wet. Cotton fields across the state were being evaluated due to possible hail damage and a cold snap from 2 weeks ago. Producers scouted for insect damage, but no treatable pest populations were reported.
The Kansas crop needs clear, dry, and hot weather to progress the crop. Plans were back on schedule to build a warehouse in Wichita that will store around 150,000 bales.
Cotton-growing areas of western Oklahoma received three-quarters of an inch up to one and one-third of an inch of moisture in the period. Most of the irrigated cotton was planted. Dryland acreage benefitted from the recent rainfall. Soil moisture conditions also improved. Sources estimated that approximately 35 to 45 percent of the dryland crop was planted in Oklahoma.
Spot cotton trading was light. Supplies were moderate. Producer offerings were light. A few gin recaps were offered, mostly for price discovery. No new sales were reported. Demand was light. Average local spot prices were weak. Foreign mill inquiries were light. Interest was best from Bangladesh, Pakistan, and Turkey for 2019-crop cotton. China inquired for new-crop cotton.
No new sales were reported. The COVID-19 Pandemic continued to impact commodity markets. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive.
Temperatures were mostly in the 80s. Strong storms brought scattered showers, hail, and high winds early in the reporting period. Reports of tennis ball sized and golf ball sized hail was reported in some areas. Officially, nearly three-quarters of an inch of moisture was recorded, but some areas received over two inches. Cotton fields were being evaluated. Dryland cotton was dusted; many of those fields did not have cotton up.
Planting is active in the region where soils were dry enough to support equipment. Many producers will continue to dry plant cotton in order to meet the May 31 planting deadline. Sources estimated around 30 to 40 percent was planted. A few High Plains counties reported pill bugs, thrips, and wireworms. Treatments were made. Overall, the crop continued to make progress.
- In Kansas, a light volume mixed lot containing mostly color 31, leaf 4 and better, staple 35 and 36, mike 41-43, strength 29-30, uniformity 81 and 82, with 75 percent extraneous matter sold for around 49.50 cents per pound, FOB car/truck (compression charges not paid).
- A light volume mixed lot of mostly color 33 and 43, leaf 4 and 5, staple 36 and 37, mike 36-42, strength 29-30, uniformity 80-82, with 100 percent extraneous matter sold for around 39.25 cents, same terms as above.
- In Oklahoma, a light volume of mostly color 31, leaf 3 and 4, staple 36-37, mike 35-43, strength 30-33, and uniformity 80-82 sold for around 53.50 cents, same terms as above.
- Similar lots containing staple 33-36, and mike 46-50 sold for around 52.00 cents, same terms as above.
- A light volume of color 11-31, leaf 3 and better, staple 31-33, mike 41-46, strength 27-29, and uniformity 76-79 sold for around 42.00 cents per pound, FOB car/truck (compression charges not paid).
Western Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies were moderate. Demand was light. The effects of the COVID-19 Pandemic continues to disrupt the marketing chain for cotton. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was light. Foreign mill inquiries were light.
Temperatures reached the mid-to-high 100s in Arizona. Excessive heat warning was in effect through mid-evening of May 29 in western Arizona. In central Arizona, excessive heat warnings were in effect through Sunday, May 31. The Yuma crop made good progress as the crop was setting bolls. Producers irrigated the crop to help reduce heat stress. The crop made good progress in the DSW.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were light. The COVID-19 Pandemic continued to impact the U.S. economy. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.
High temperature records were broken in some areas of the SJV as daytime highs reached 106 degrees on Wednesday, May 27. Excessive heat warnings were in effect through May 28. The crop responded to the heat and made good progress. Temperatures were on the way down in the near-term forecast. Producers irrigated the crop to combat heat stress.
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. Shippers continued to maintain previously made sales contracts. Some contract obligations were rolled to 2021.
Excessive heat with temperatures in the high 100s prompted heat warnings in the Far West. Producers managed heat stress by applying water to the crop. The crop made good progress.
- A light volume of CCC-loan equities was sold for around 5.25 cents per pound.
San Joaquin Valley
- No trading activity was reported.
- No trading activity was reported.