USDA – Weekly Cotton Review: October 28, 2011

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October 28, 2011

 Spot cotton quotations averaged 85 points higher 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 97.25 cents per pound for the week ended Thursday, October 27, 2011.  The weekly average was up from 96.52 cents last week, but down from 120.08 cents reported the corresponding period a year ago.  Daily average quotations ranged from a low of 94.54 cents on Friday, October 21 to a high of 101.84 cents on Thursday, October 27.  Spot transactions reported in the Daily Spot Cotton Quotations for the week ended October 27 totaled 38,472.  This compares to 24,740 bales last week and 25,401 bales reported a year ago.  Total spot transactions for the season were 122,620 bales, compared to 69,521 bales the corresponding week a year ago.  The ICE December settlement prices ended the week at 104.32 cents, compared to 96.86 cents last week.

Prices are in effect from October 28-November 3, 2011

Adjustment World Price (AWP)                 87.40             ELS Competitiveness Payment                0.00
Loan Deficiency Payment (LDP)                  0.00             Fine Count Adjustment  2010 Crop         1.14
Coarse Count Adjustment (CCA)                  0.00             Fine Count Adjustment 2011 Crop          1.19

Source:  Farm Service Agency, FSA, USDA

Southeastern Markets  Spot cotton trading was moderate.  Supplies were light.  Demand was moderate.  Producer offerings were light.  Average local spot prices were higher.  Trading of CCC-loan equities was inactive.  Warm, clear conditions allowed harvesting activities to continue uninterrupted during the week.

Producers were attempting to complete as much    picking as possible, to stay ahead of wet weather forecasted in the near term.  Boll opening was nearly complete and defoliation applications were expanding at a rapid pace.  Ginning gained momentum as backlogs of   modules increased on local gin yards.  Exceptional yields continued to be reported on irrigated acreage.  Many dryland fields had yet to be harvested and in many of them, producers anticipated lower yields.  Overall, the undertone was positive, as good qualities continued to be reported from classing offices in the region.   South Central Markets  North Delta

Spot cotton trading was slow.  Supplies and demand were moderate.  Average local spot prices were higher.  Trading of CCC-loan equities was inactive. No forward contracting was reported.  Clear, cool weather for most of the week allowed harvesting to continue to progress rapidly towards completion. A cold front produced light rain showers at the end of the week.  Harvesting advanced to 74  percent in Arkansas, 73 in Missouri, and 58 percent in Tennessee, according to the National Agricultural    Statistics Service.  These figures surpassed the 5-year average of 65 percent and 62 percent in Arkansas and Missouri, respectively.  Harvesting remained behind the 5-year average of 60 percent in Tennessee.

Producers were generally satisfied with yields and quality; especially the percentage of the crop with   staple length 36 and longer.  Most gins were operating around the clock and had backlogs of modules on their yards.  Producers  also shredded stocks and completed some fieldwork.

 South Delta

Spot cotton trading was moderate.  Supplies were moderate.   Demand was light.   Average  local  spot  prices   were higher.  Trading of CCC-loan equities was    inactive.   No forward contracting was reported.

Favorable weather allowed producers to com-plete harvesting in Louisiana and to make excellent progress in Mississippi.  Stalk shredding and some fieldwork were also accomplished. According to figures released by the National Agricultural    Statistic Service, harvesting in Mississippi advanced to 72 percent, well ahead of the 5-year average of 62 percent.  Approximately 25 percent of the gins in Louisiana had completed annual pressing operations.  Several other gins limited operations to a couple of gins days.  Most gins in Mississippi continued to  operate at a steady pace.   Southwestern Markets

 East Texas-Oklahoma

Spot cotton trading was slow.  Supplies were light.  Demand was light.  Average local spot prices were higher.  Producer offerings were light.  No forward contracting was reported.  Trading of CCC-loan equities was moderate.  No domestic mill activity was    reported.  Foreign mill interest was very light. In south Texas, three gins continued to gin a backlog of modules in the Winter Garden and the Upper Coast areas.  A few late-planted fields were harvested.  Harvesting and ginning in east and central Texas neared completion.  In Kansas, about 20 percent was harvested.  Cooler temperatures prevailed and intermittent rainfall was received.  State-wide freezing temperatures occurred and supported defoliation applications.  In Oklahoma, a cold-front brought rain, hail, and cooler temperatures.  Harvesting  progressed slowly, and most producers waited for a killing freeze to encourage leaf drop.  West Texas

Spot cotton trading was active.  Supplies were moderate.  Demand was light.  Average local spot prices were higher.  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 best from  Taiwan and Turkey.

A cold front disrupted fieldwork with cooler temperatures, rainfall, and snow.  Wind gusts were up to  40 miles per hour in some areas, and light snow was received in the northeastern counties.  Rainfall was intermittent and heavy in spots.  In Castro County, open cotton received over an inch of rainfall followed by two  inches of snow.  Gin yards were too soft to transport modules, and ginning operations were delayed.   Freezing temperatures occurred throughout the state and assisted with leaf-drop. The area continued under droughty conditions, although rainfall and snow was received during the week.  Innovative ideas have led to non-

traditional uses of cotton plants, stalks, and fields during the prolonged drought.  Some producers were baling the whole plant and shredded stalks after releasing to insurance for supplemental cattle feed.  Reports indicated plans were to grind the cotton plants and stalks for mixing with other forages.  Some producers fenced    cotton fields for    cattle grazing, after releasing acreage to insurance.  The area around Abilene had begun harvesting, but a hard freeze is needed.  Daytime temperatures ranged from the 40 to 90 degrees, and the nighttime temperatures were 30 to 50 degrees.  The Lubbock Classing Office had begun the third shift to keep pace with sample  receipts.  Cottonseed prices were reported around $300 to $370 per ton, depending on   location and transportation expenses.  Burr prices were reported around $60 to $100 per ton.  Organic cottonseed prices were around $580 to $620 per ton.  Cotton harvesting has not begun.  Defoliation is dependent on freezing temperatures to promote leaf-drop, and producers waited for a killing freeze.   Western Markets

      Desert Southwest (DSW)

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.    Average local spot prices were higher.  No forward contracting or domestic mill activity was reported.   Producers delivered previously contracted cotton.  Producers offered 2011-crop cotton.  No new sales were reported.  Foreign mill interest was light.  Warehouse activity increased as bales were received from gins.  Clear, sunny conditions allowed defoliation and harvesting to continue uninterrupted throughout the DSW.  Harvesting was 38 percent completed, slightly ahead of the 5-year average, according the National Agricultural Statistic Service (NASS) report, week ending October 23.  Ginning continued.  Producers shredded stalks. Defoliation and harvesting activities gained momentum in New Mexico and El Paso, Texas.  Harvesting was 26 percent completed, 13 percentage points ahead of the 5-year average, according to NASS.  Modules were stored in fields and gin yards. Ginning progressed in New Mexico and had just begun in El Paso, Texas.   Drought conditions continue to impact soil moisture in southeastern portions of New Mexico and into El Paso, Texas.   San Joaquin Valley (SJV)

Spot cotton trading was inactive.  Supplies of new-crop cotton were slowly increasing, as more gins began operations.  Demand was light.  Average local spot prices were higher.  Producers delivered to marketing  pools and previously-contracted cotton.  No forward contracting or domestic mill activity was reported.     Foreign mill interest continued light.   Shippers indicated little-to-no demand for Acala growth.  Clear, sunny weather allowed field activities to progress.  Harvesting and ginning gained momentum throughout the Valley.  Reports indicated that approximately one third of the crop was harvested.  Fields were plowed and prepared for winter rains.  Organic harvesting was on pace, with approximately 50 percent     completed.  Permits for ginning were still in process.   American Pima (AP)

Spot cotton trading was inactive.  Supplies and demand were light.  Average local prices were steady.  No forward contracting or domestic mill activity was reported.   Foreign mill inquiries were light.  Shippers reported mills were purchasing, but in light volumes.  Sources reported that Egypt implemented a ban on all cotton imports that went into effect on October 25.  Clear, sunny weather allowed field activities to advance throughout the far west.   Some first-picking will be completed  around November 1 in the San Joaquin Valley.   Ginning continued.    Textile Mill

Inquiries from domestic mill buyers were light.  The undertone from mill buyers remained cautious, as they     attempted to gauge the demand entering 2012.  Backlogs of finished products had started to accumulate at some locations and mills adjusted schedules, accordingly.  Some mill buyers bought on a hand-to-mouth basis, and purchased raw cotton as orders developed and inventories cleared.  Demand for ring-spun and open-end yarn was moderate.

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

Southeastern Markets

* A moderate volume of color mostly 31 and 41, leaf 2-4, staple 34 and longer, mike 43-52, strength 27-30, and uniformity 79-81 sold for 250 to 350 points off ICE March futures, FOB car/truck (Rule 5, compression charges paid).

* A moderate volume of color 31 and 41, leaf 3 and 4, staple 34 and longer, mike 35-49, strength 27-30, and uniformity 79-81 sold for 225 points on ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

* A light volume of color 31, leaf 3 and 4, staple 33-35, mike 50-52, strength 29-31, and uniformity 80-82 sold for around 102.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

  South Central Markets

 North Delta

* A light volume of color 41 and better, leaf 4 and better, staple mostly 35-37, mike 34-49, strength 29-36, and uniformity 80-83 traded at around 101.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

* A light volume of 2010-crop cotton, color 41 and better, leaf 4 and better, staple 33-35, mike 49-

52, strength 28-31, and uniformity 80-82 sold at around 94.00 cents, same terms as above.

South Delta

* A light volume of mixed lots, color 52 and better, leaf 5 and better, staple mostly 36, mike 42-52, strength 27-33, and uniformity 79-82 sold at around 100 points off ICE December futures, FOB car/truck (Rule 5, compression charges paid).

* A moderate volume of mixed lots, mostly color 42 and better, leaf 5 and better, staple 31-33, mike 50-55, strength 24-28, and uniformity 78-81 sold at around 425 points off ICE December futures, same terms as above.

  Southwestern Markets East Texas

* A light volume of new-crop cotton, color 11 and 12, leaf 2 and better, staple 35-36, mike 46-48, strength 29-31, and uniformity 81-83 sold for around 101.50 cents per pound, FOB warehouse (compression charges not paid).

* A moderate volume of color mostly 21 and 31, leaf 2 and better, staple 33, mike 43-45, strength 26-30, and uniformity 79-81 traded at around 90.00 cents, same terms as above.

* A light volume of color 21 and 31, leaf 2 and better, staple 32-33, mike 53-54, strength 27-28, and uniformity 79-80 sold for around 83.00 cents, same terms as above.

* A heavy volume of 2010 mixed lots, color 42 and better, leaf 5 and better, staple 31-37, mike 30-

50, strength 24-31, uniformity 77-81, and about 25 percent extraneous matter traded at around 1700 points off ICE December Futures, same terms as above.

* A heavy volume of CCC-loan equities traded for 78.50 to 87.00 cents per pound.

* A moderate volume of new-crop cotton, mostly color 21 and better, leaf 3 and better, staple 35 and longer, mike 42-48, and strength 29-31 sold for 100.00 to 105.00 cents per pound, FOB car/truck (compression charges not paid).

* A moderate volume of color 21 and better, leaf 3 and better, staple mostly 35-36, mike 44-46, strength 30-33, and uniformity 80-82 sold for 96.00 to 99.00 cents, same terms as above.

* A heavy volume of color 31 and better, leaf 3 and better, staple 32-35, mike 44-49, strength 27-

29, and uniformity 79-80, sold for around 87.00 to 90.50 cents, same terms as above.   Western markets  Desert Southwest

* No trading activity was reported.

    San Joaquin Valley

* No trading activity was reported.

    American Pima

* A light volume of 2011-crop cotton was sold to China.

 

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