USDA – Weekly Cotton Review: Dec 23,2011

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December 23, 2011

Season’s Greetings

Due to the holiday, the next report will be released on Friday, January 6, 2012

Spot cotton quotations averaged 92 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 27.0-28.9, uniformity 81.0-81.9) in the seven designated markets averaged 83.35 cents per pound for the week ended Thursday, December 22, 2011.  The weekly average was down from 84.27 cents last week and 137.62 cents reported the corresponding period a year ago.  Daily average quotations ranged from a low of 83.08 cents on Friday, December 16 to a high of 83.64 cents on Monday, December 19.  Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 22 totaled 23,387.  This compares to 44,815 bales last week and 23,472 bales reported a year ago.  Total spot transactions for the season were 354,785 bales, compared to 338,059 bales the corresponding week a year ago.  The ICE March settlement prices ended the week at 87.24 cents, compared to 86.29 cents last week.

 Prices are in effect from December 23-29, 2011

 Adjustment World Price (AWP                    72.22           ELS Competitiveness Payment               0.00

Loan Deficiency Payment (LDP)                  0.00             Fine Count Adjustment  2010 Crop         1.65

Coarse Count Adjustment (CCA)                  0.00             Fine Count Adjustment 2011 Crop          1.70

Source:  Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #19 FOR UPLAND COTTON

December 22, 2011

 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 December 29, 2011, allowing importation of 14,594,057 kilograms (67,030 bales) of upland cotton.

Quota number 19 will be established as of December 29, 2011, and will apply to upland cotton purchased not later than March 27, 2012, and entered into the U.S. not later than June 25, 2012.  The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2011 through July 2011, 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  Spot cotton trading was moderate.  Supplies were moderate.  Demand was good.  Producer offerings were moderate.  Average local spot prices were lower.  Trading of CCC-loan equities was inactive.  Harvesting activities neared completion as mostly clear conditions were observed early in the week.  Daytime highs were in the mid-60s to low 70s.  Fieldwork was interrupted late week as around one-half of an inch to two and one-half inches of accumulated  precipitation was received in south Alabama and Georgia.  Lesser totals of around one-quarter of an inch or less was received in the Carolinas.  Ginning was  winding down throughout the region.  Some of the larger gins planned to continue operations well into January 2012, as they process backlogs of     modules and wait for the last remaining fields to be picked.  Saturated soils prevented the harvesting of some remaining fields in North Carolina and Virginia, as producers waited for firmer conditions to support equipment.  Producers considered planting options for 2012.

South Central Markets

North Delta

Spot cotton trading was slow.  Supplies were moderate.  Producer offerings were light.  Demand was light.  Average local spot prices were lower.  Trading of CCC-loan equities was inactive.  No forward contracting was reported.         Wet weather conditions continued as a series of light rain showers moved through the region during the week.   Rainfall totals varied from one to two  inches.  Daytime temperatures were in the mid-60s and overnight lows were in the low 40s.  Soils        remained saturated and fieldwork was at a standstill. Local experts reported a few fields of cotton remained in Missouri.  A few gins continued to operate in Arkansas and Missouri. Tennessee gins had     completed ginning operations for the season.

South Delta

Spot cotton trading was inactive.  Supplies were    moderate. 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.

 A series of rain showers throughout the week   produced about two inches of welcomed moisture.     Daytime temperatures were in the low 70s and    overnight lows were in the mid-50s.  Fieldwork,   especially stalk chopping, remained at a standstill.

Southwestern Markets

 East Texas-Oklahoma

Spot cotton trading was slow.    Supplies and demand were light.  Average local spot prices were lower.  Trading of CCC-loan equities was inactive.  Foreign mill inquiries were light.  No forward contracting or domestic mill activity was reported.

A cold front brought little moisture to the region.  Some locales received up to one-quarter of an inch of rainfall in central and south Texas, Oklahoma, and Kansas. Mostly dry conditions continued.   Ginning continued in parts of central Texas, Oklahoma, and Kansas.  Local experts reported spring planting      intentions were the same as the previous year.  Much more rainfall is needed to replenish deep soil      moisture.

West Texas

Trading of spot cotton was active.  Supplies were heavy.  Producer offerings were heavy.  Demand was moderate.  Average local spot prices were lower.    No forward contracting or domestic mill activity was reported.  Trading of CCC-loan equities was light.  Foreign mill interest continued light for US growths.  A few mills inquired for better qualities with staple 35 and longer for the purpose of price discovery.  No sales were reported.  Shippers reported that traditional buyers of short staple cottons were out of the   market.  Producers delivered cotton against previous contracts.  Shippers were busying handling paperwork for deferred payments and processing cotton into the CCC-loan.  A winter storm brought beneficial moisture to the region.  Snow and ice was received in the Texas   Panhandle.  A couple of inches of snow delayed    harvesting and ginning.  Local experts reported      approximately five  percent of the crop was yet to be harvested.  The Lubbock area received one-half of an inch of rainfall.  Most gins completed operations for the season.

Western Markets

 Desert Southwest (DSW)

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.  Average local spot prices were weak.  No forward contracting or domestic mill activity was reported.   Clear, cold conditions were the norm in Arizona.  Harvesting continued in western Arizona.  A wintery mix of rain and snowfall was reported in New Mexico.  Harvesting was completed in New Mexico and El Paso,    Texas.  Most gins will close two days for the Christmas weekend, with a few gins closed on Monday.  San Joaquin Valley (SJV)

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.  Average local spot prices were lower.    Producers inquired for 2012 forward contracting prices for saw-and roller-ginned Upland cotton.   Foreign mill interest continued light, but was good for color 31 and better, leaf 3 and better, and staple 35 and longer.    Morning fog was prevalent early in the reporting period.  Overall, weather conditions were cold and dry.  Moisture was needed to re-build the mountain snow packs to ensure a healthy water supply for California.    Some gins plan to close for the Christmas holiday for a couple of days.  Saw-ginning operations were completed, but roller-ginning continued.   American Pima (AP)

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.  Average local prices were steady.    Producers showed an interest in 2012-crop contracting.  No sales were reported.  No domestic mill activity was reported.   Foreign mill inquiries were light for 2011-crop cotton.  Most gins will close two days for the Christmas weekend, with a few gins closed on Monday as well.   Textile mill

Buyers for domestic mills inquired for a moderate volume of color 41, leaf 4, and staple 34 for first quarter through third quarter 2012 delivery.  No sales were reported.  Some mills expanded downtime for the holiday in order to reduce finished product inventories; some planned a few days off and others scheduled up to two weeks.  A denim mill in South Carolina, in operation since 2002, recently announced its closure.          Demand through export channels was moderate.  Agents for mills in Taiwan inquired for a moderate volume of color 41, leaf 4, and staple 34 for shipment January 2012.  Representatives for mills in South Korea inquired for a moderate volume of color 31 and 41, leaf 4, and staple 33 and 34 for March through June 2012 shipment.  Demand was best throughout the Far East for any discounted or low-grade styles of cotton.

Southeastern Markets

 * A moderate volume of color 21 and 31, leaf 2-4, staple 36 and longer, mike 35-49, strength 29-31, and uniformity 81-83 sold for 87.50 to 87.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

* A moderate volume of color 41 and 42, leaf 3 and 4, staple 34 and longer, mike 37-52, strength 29-31, and uniformity 80-82 sold for around 375 points off ICE March futures, FOB car/truck (Rule 5, compression charges paid, 30 days free storage).

* Mixed lots containing color mostly 41, leaf 3 and 4, staple 34 and longer, mike 43-52, strength 28-31, and uniformity 81-83 sold for 425 to 550 points off ICE March futures, same terms as above.

   South Central Markets

North Delta

* No trading activity was reported.

 South Delta

* A light volume of color 41, leaf 4 and better, staple 35 and longer, mike 38-44, strength 28-30, and uniformity 80-82 traded at around 85.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

 * A light volume of color 41, leaf 5 and better, staple 33 and longer, mike 43-50, strength 28-33, and uniformity 79-83 traded at around 80.25 cents, same terms as above.

Southwestern Markets

East Texas

* In south Texas, a light volume of  color mostly 21 and better, leaf 2 and better, staple 31-33, mike 47-52, and strength 25-30 sold for around 76.50 cents per pound, FOB warehouse (compression charges not paid.)

* In Oklahoma, a light volume of color mostly 21 and 31, leaf 5 and better, staple 35 and longer, mike 30-40, strength averaging 31.1, and 75 percent extraneous matter (mostly bark) sold for around 78.50 cents, FOB car/truck (compression charges not paid.)

 West Texas

* A moderate volume of color 31 and better, leaf 3 and better, staple 32-36, mike 35-53, strength averaging 30.0, uniformity averaging 80.7, with 25 percent extraneous matter (mostly bark) sold for around 76.00 cents per pound, FOB car/truck.

* Similar lots containing a moderate volume of staple 35 and longer, mike 40-49, strength averaging 32.0, with around 75 percent extraneous matter (bark and seed) sold for around 79.25 cents, same terms as above.  * A heavy volume of mostly color 21 and better, leaf 3 and better, staple 32-38, mike 28-53, strength 24.0-35.0, and around 25 percent extraneous matter (mostly bark) sold for around 84.50 cents, same terms as above.  * A moderate volume of color 31 and better, leaf 3 and better, staple 35, mike 35-49, strength averaging 29.9, and uniformity averaging 80.7 sold for around 86.00 cents, same terms as above.  * A moderate volume of CCC-loan equities sold for around 27.00 cents.     Western Markets

Desert Southwest

* No trading activity was reported.

San Joaquin Valley

* A light volume of color 21 and 31, leaf 2 and better, staple 36 and longer, mike averaging 41.8 and strength averaging 30.5 sold for around 103.00 cents per pound, FOB gin yard.

American Pima

* No trading activity was reported.

Source: USDA

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