Weekly Cotton Review

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April 15, 2011

Spot cotton quotations averaged 177 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 26.5-28.4, uniformity 81) in the seven designated markets averaged 195.11 cents per pound for the week ended Thursday, April 14, 2011. The weekly average was down from 196.88 cents last week, but up from 73.05 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 199.70 cents on Monday, April 11 to a low of 190.39 cents on Thursday, April 14. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 14 totaled 519 bales. This compares to 6,706 bales last week and 3,095 bales reported a year ago. Total spot transactions for the season were 579,416 bales, compared to 844,870 bales the corresponding week a year ago. The ICE May futures settlement prices ended the week at 196.04 cents, compared to 208.22 cents last week.

Prices are in effect from April 15-21, 2011

Adjustment World Price (AWP) 207.63 ELS Competitiveness Payment 0.00

Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2009 Crop 0.40

Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2010 Crop 0.50

Source: Farm Service Agency, FSA, USDA

Southeastern Markets

Spot cotton trading was inactive. Supplies were light. Demand was light. Producer offerings were light.

Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Planting had begun on a very limited number of acres in Alabama and Georgia. Producers were busy spreading fertilizer and lime, as pre-planting preparations gained momentum. Recent rainfall helped to improve soil conditions and cotton planting was expected to increase in these areas, as ground temperatures rise in the weeks ahead. Droughty conditions persisted along coastal areas from Georgia to the Eastern Shore of Virginia.

A period of beneficial wet weather is needed to fortify sub-soil moisture before planting.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies and demand were very light. Average local spot prices were lower.

Trading of CCC-loan equities was inactive. No forward contracting was reported.

Topsoil moisture conditions throughout the region were rated mostly adequate, following a series of rain storms. A few areas would benefit from additional rainfall. Overnight temperatures were in the mid 40s and daytime conditions were mostly cool and sunny. Fieldwork continued on a limited basis, including the application of pre-plant herbicides and fertilizer. No cotton planting was reported.

South Delta

Spot cotton trading was inactive. Supplies and demand were very light. Average local spot prices were lower.

Trading of CCC-loan equities was inactive. No forward contracting was reported.

Some cotton-producing areas in central and northeastern Louisiana received one-quarter of an inch to one and one-quarter of an inch of rain early in the reporting period. Planting was delayed in areas that received the heavier amounts of rain. Planting was delayed in areas that did not receive any beneficial moisture due to dry topsoil conditions. Overnight temperatures in the 40s also contributed to planting delays, as some producers preferred to wait for soils to warm. Earlier-planted

fields were up to a stand. More rainfall is needed in most areas to provide adequate moisture for good seed ermination and plant development. Overall, local experts estimated planting was 10 percent completed.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was inactive. Supplies were light. Demand was light. Producer offerings were light.

Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Foreign mill interest was very light.

In Texas, a severe storm deposited about one and one-half inch of rainfall. Winds of 80 mph in the Blackland Prairies destroyed some farming structures. Planting continued in South Texas. Extreme dryness stressed emerged plants. Parched fields need beneficial rainfall. Daytime high temperatures were mid-70s and 80s and nighttime lows were in the 40s to 60s. In Kansas, irrigated acres were pre-watered. Herbicide burn-down was applied. Wildfires were common, as the state suffered from droughty conditions. Daytime temperatures were in the 60s to 90s and nighttime lows were 40s and 50s. In Oklahoma, the drought continued as the governor declared an extended state of emergency. A burn ban remained in effect for more than half of the state. Trace amounts of rainfall was received, as a front moved through the area, but more rainfall is needed. Daytime highs were in the 70s and 80s and the nighttime lows were in the 40s and 50s.

West Texas

Trading of spot cotton was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was inactive. No domestic mill activity was reported. Foreign mill interest was very light.

Dry conditions prevailed. Daytime temperatures were in the 70s to 90s and nighttime lows were in the 30s and 40s. High winds limited field preparations and fueled rangeland fires. Farming operations experienced minimal fire damage; however, ranching operations suffered greater losses. No measurable precipitation was received and drought conditions expanded. Irrigated fields were pre-watered.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. No domestic mill activity was reported. Foreign mill inquiries were light.

Hot, dry conditions helped the crop to progress normally in Yuma, Arizona. Planting continued uninterrupted in central Arizona. Cotton planting was 20 percent completed, 9 percentage points behind last year and 3 ercentage points behind the 5-year average, according to the NASS Arizona Agri-Weekly released on April 11. Limited planting began in New Mexico, with about 19 percent of the crop planted, according to the NASS New exico Crop and Weather report released on April 11. Dry, windy conditions were the norm for New Mexico and El Paso, Texas. Temperatures were in the 90s. Brush and range fires, fueled by winds and low humidity, kept firefighters busy. Industry representatives reported that no measureable moisture was received in the last 180 days.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were

lower. No domestic mill activity was reported. Foreign mill inquiries were light.

One-third of an inch of rain was received in the Valley early in the reporting period. Soil temperatures were optimal for planting as warm, dry weather returned. Young cotton seedlings emerged in the south Valley.

Planting resumed as fields were dry enough to support machinery.

American Pima (AP)

Spot cotton trading was inactive. Supplies were light. Demand was good. Average local spot prices were

steady. Foreign mill inquiries were steady.

Crop progress was normal in Yuma, Arizona, with 60 percent of the crop in first true-leaf stage.

Planting in the San Joaquin Valley was delayed by a cold front that brought one-third of an inch of moisture early in the reporting period. Planting resumed in the San Joaquin Valley, as warm, dry conditions entered the region. Seedling emergence was normal in some early-planted cotton. Extremely dry conditions persisted in cotton-growing areas of New Mexico and El Paso, Texas. Brush and range fires fueled by winds and low humidity kept firefighters busy. Rain is needed to replenish sub-soil moisture.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2011-crop cotton for August through December delivery. Demand was good for color 51 and better, leaf 5 and better, and staple 32 and longer. Mill buyers attempted to assess finished product demand into the fourth quarter of 2011 and first quarter of 2012, as they cautiously considered 2011-crop cotton needs. Most mills continued to operate at capacity.

Inquiries through export channels were moderate. Demand was good throughout the Far East for any discounted or low-grade styles of cotton.

Southeastern Markets

* No trading activity was reported.

South Central Markets

North Delta

* No trading activity was reported.

South Delta

* No trading activity was reported.

Southwestern Markets

East Texas

* In Kansas, a very light volume of color 21 and 31, leaf 2, staple 35-37, mike 40-42, strength 28-29, and uniformity 80-81 sold for around 182.00 cents per pound, FOB car/truck (compression charges not paid)?

* A light volume of color 42 and better, leaf 5 and better, staple 32-35, mike 34-38, strength 26-30, and uniformity 78-81 sold for around 176.50 cents, same terms as above.

West Texas

* A very light volume of color 41 and better, leaf 4 and better, staple 32-39, mike 34-44, strength 27-32, and uniformity 77-82 sold for around 192.00 cents per pound, FOB car/truck (compression charges not paid).

* A very light volume of color 21 and better, leaf 2 and better, staple 36-37, mike 42-45, strength 28-33, and uniformity 80-82 sold for around 184.00 cents, same terms as above.

Western Markets

Desert Southwestern

* No trading activity was reported.

San Joaquin Valley

* A moderate volume of 2011-crop cotton was contracted for around 1200 points on December 2011 futures.

American Pima

* No trading activity was reported.

(Source: http://www.dairyherd.com/dairy-news/markets/grains/Weekly-Cotton-Review-121068.html)

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