Weekly Cotton Market Review – USDA

Average spot quotations were 69 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 55.50 cents per pound for the week ending Thursday, June 18, 2020.

The weekly average was down from 56.19 last week and from 60.77 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 54.47 cents Monday, June 15 to a high of 56.83 cents Wednesday, June 17. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 18 totaled 6,220 bales. This compares to 9,065 reported last week and 21,189 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,541,371 bales compared to 1,230,969 bales the corresponding week a year ago. The ICE Oct settlement price ended the week at 59.37 cents, compared to 60.15 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #9 FOR UPLAND COTTON June 18, 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 June 26, 2020, allowing importation of 7,445,241 kilograms (34,195 bales of 480-lbs) of upland cotton.

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Quota number 9 will be established as of June 26, 2020 and will apply to upland cotton purchased not later than September 22, 2020 and entered into the U.S. not later than December 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 February 2020 through April 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 light. Average local spot prices were lower. 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 partly cloudy conditions prevailed over Alabama, the Florida Panhandle, and Georgia during the week. Daytime high temperatures were in the low 80s to low 90s. Scattered thunderstorms brought around one-half of an inch to two inches of moisture to portions of north and south Georgia early in the period. The crop made good progress and squaring was underway. Producers sidedressed nitrogen and applied plant growth regulators and herbicides to fields. Plant bugs were present at treatable levels in some fields.

In Alabama, spider mite populations were building in central areas. Alabama Cooperative Extension System scientists have confirmed the presence of cotton leafroll dwarf virus (CLRDV-AL) in Alabama cotton. In Georgia, whitefly populations were being monitored in areas where they historically build. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 15, cotton squaring had reached 24 percent completed in Georgia and 12 percent completed in Alabama.

Mostly cloudy conditions dominated the weather pattern across the upper Southeastern region. Daytime high temperatures varied from the low 60s to mid-80s. Widespread thunderstorms brought moderately heavy rainfall to portions of eastern South Carolina, and areas throughout North Carolina and Virginia. Weekly accumulated precipitation totals measured from one-half of an inch to four inches of moisture, with heavier accumulations observed in some locales.

The wet weather interrupted fieldwork and delayed planting, which remained behind the five-year average in the Carolinas and Virginia. The moisture helped reduce spider mite populations. Plant bugs were present in some areas and producers applied treatments to fields that met threshold levels. Aphids were starting to be detected in some fields. According to the NASS Crop Progress report released June 15, cotton squaring had reached 16 percent completed in Virginia, 14 in South Carolina, and 8 percent completed in North Carolina.

Textile Mill

Inquiries from domestic mill buyers were light. No sales were reported. The undertone from mill buyers remained very cautious, due to closures or reduced schedules associated with the COVID-19 Pandemic. Most mills continue to operate at minimal capacity; but some incremental increases in production were reported at some locations as finished product orders increased. 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 very light. No inquiries were reported. Agents for mills in Bangladesh purchased a light volume of color 42, leaf 4 and better, and staple 32 and longer for nearby shipment.

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 lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact globalized manufacturing and consumer supply chains.

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The crop made good progress under excellent growing conditions as clear skies and warm temperatures prevailed during the week. Daytime temperatures were mostly in the upper 80s. Overnight lows were in the 60s and 70s.

Fields were being carefully scouted to insure that flare-ups of thrips, spider mites, and plant bugs were treated once they reached threshold levels. Producers reported varying levels of weed and insect pressure. Producers were applying herbicides, as necessary, in their battle to control pigweeds and other pests. Fertilizer was also applied to some fields. Some early-planted fields were treated to control excessive growth.

According to the National Agricultural Statistics Service’s Crop Progress report released on June 15, squaring had reached 11 percent in Arkansas and 12 percent in Tennessee. No squaring was reported in Missouri, where crop development is lagging well behind the five-year average due to a cold and wet planting season.

South Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Commodity prices improved during the week, but the COVID-19 Pandemic continues to disrupt travel, trade, and many normal activities around the world.

Clear and mild climatic conditions allowed the crop to progress normally during the week. Daytime temperatures were mostly in the upper 80s and low 90s. Overnight lows were in the 60s as a cool front moved through the region. The short-term weather forecast calls for continued dry weather; dryland fields are in need of rainfall for normal plant development. Heavy insect pressure from thrips was reported in parts of Mississippi, especially in late-planted fields.

A few producers in Louisiana reported that aphid and plant bug populations were building in some fields. Treatments were made, as necessary, to avoid damage as the crop moved into the squaring stage of growth throughout the territory. According to the National Agricultural Statistics Service’s Crop Progress report released on June 15, squaring had reached 26 percent in Louisiana and 5 percent in Mississippi.

Trading

North Delta

  • No trading activity was reported.

South Delta

  • No trading activity was reported.

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 lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. The lack of demand and the COVID-19 Pandemic continued to impact commodity markets.

Stands were setting bolls and blooming throughout the Coastal Bend and Upper Coast. Recent rainfall gave the crop a boost. Irrigation water was applied. Producers continued monitoring the pest situation and applied treatments where needed. Dryland fields had reached cut-out in the Rio Grande Valley and irrigated fields were blooming out at the top, according to the Pest Cast Newsletter released on June 12.

Producers were encouraged with the presence of a good boll load. Recent rainfall caused weeds to grow and efforts were underway to control overgrowth. A good rain is needed in the northern Blackland Prairies to help the stands progress. The crop is squaring.

In Kansas, rainfall is in the weekend forecast and producers are hopeful it will help dry conditions. Replanted stands advanced under daytime highs in the mid-90s with 30 to 40 mile per hour winds. Irrigation water was applied. Replanting and final planting was underway in Oklahoma. The irrigated stands progressed. There were pockets of emergence issues due to dry conditions. Moisture is needed and rain is in the nearby forecast.

West Texas

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 slow. Foreign inquiries were light. The COVID-19 Pandemic continued to impact commodity markets.

Dryland planting and irrigated planting will finalize on June 20 in the Rolling Plains. Some dryland stands need a good rain to germinate. Squaring was observed in the northern counties and some irrigated stands were at 6 true leaves in counties around Lubbock. Most dryland fields and some irrigated stands in the Northern High Plains were severely damaged during a period of prolonged high winds with 70 miles per hour gusts.

Drought conditions expanded and intensified. Late in the period, localized rainfall brought up to 4 inches of beneficial moisture to some fields. Daytime temperature highs were in the upper 80s and low 90s. Thrips and wireworms were present at treatable levels. Spray rigs were busy applying insecticides and herbicides.

Trading

East Texas

  • In Kansas, a heavy volume of mostly color 32, leaf 5, staple 36 and longer, mike 35-44, strength 28-32, uniformity 78-82, and 75 percent extraneous matter sold for around 49.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a moderate volume of mostly color 42 and better, leaf 5, staple 35 and longer, mike 35-47, strength 28-35, uniformity 78-83, and 75 percent extraneous matter sold for around 49.50 cents, same terms as above.

West Texas

  • A moderate volume containing mostly color 21 and 22, leaf 3 and better, staple 35 and longer, mike 39-52, strength 29-35, and uniformity 79-82 sold for around 56.75 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of mostly color 31 and 41, leaf 5, staple 35 and longer, mike 35-50, strength 28-35, uniformity 78-83, and 100 percent extraneous matter sold for around 50.75 cents, same terms as above.
  • A light volume of 2019 CCC-loan equities traded for around 2.25 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The effects of the COVID-19 pandemic slowed the marketing chain for cotton.

A low-pressure system brought below normal temperatures in the low to mid-90s for most of the week in Arizona. Triple-digit temperatures returned late in the period. Usual June weather produced only a couple of days of Level 1 heat stress that was recorded in some areas, while no Level 2 heat stress days were recorded. The Arizona crop made excellent progress and is in good condition. Local sources reported some of the early planted crop was producing bolls. No insect activity was reported.

Hot, dry conditions continued for New Mexico and El Paso, TX. Triple-digit temperatures early in the period gave way to temperatures in the mid-to-high 90s. No rainfall was recorded, but afternoon thunderstorms are in the forecast. The crop made good progress. Insect pressures were easily controlled.

San Joaquin Valley (SJV)

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

Strong winds from 30 up to 40 miles per hour created dusty conditions on Friday afternoon, June 5. A low-pressure system ushered in moderate temperatures that were in the low 80s for most of the week. Thunderstorm activity was reported in the foothills and a light dusting of snow was received in the northern Sierra Mountain range. Producers tilled and watered the crop. The crop progressed to pinhead square stage. The crop looked good, even with the late planting start. No insect pressures were reported.

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.

Below-normal temperatures were reported for Arizona and California for most of the period. New Mexico and El Paso, TX temperatures were in the low to mid-100s. Boll-setting was reported in Arizona. In the San Joaquin Valley fields of California, some of the crop reached pinhead square stage. Many California fields were planted in late April and early May, later than producers wanted to plant, due to unsettled wet spring weather. Overall, the crop made excellent progress in the Far West.

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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