Spot cotton quotations averaged 53 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 83.88 cents per pound for the week ended Thursday, April 12, 2012. The weekly average was down from 84.41 cents last week and 195.11 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 82.49 cents on Monday, April 9 to a high of 85.96 cents on Thursday, April 12. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 12 totaled 3,762 bales. This compares to 6,699 bales last week and 519 bales reported a year ago. Total spot transactions for the season were 821,870 bales, compared to 579,416 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 93.00 cents, compared to 88.54 cents last week.
Adjustment World Price (AWP 77.19 ELS Competitiveness Payment 0.00 Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2010 Crop 0.00 Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2011 Crop 0.00 Source: Farm Service Agency, FSA, USDA
USDA ANNOUNCES SPECIAL IMPORT QUOTA #9
FOR UPLAND COTTON
April 12, 2012
The Department of Agriculture’s Commodity Credit Corporation announced a spe cial 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 April 19, 2012, allowing importation of 14,594,057 kilograms (67,030 bales) of upland cotton.
Quota number 9 will be established as of April 19, 2012, and will apply to up land cotton purchased not later than July 17, 2012, and entered into the U.S. not later than October 15, 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.
Spot cotton trading was light. Supplies were light. Demand was moderate. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.
Mostly clear conditions prevailed throughout the region with daytime highs in the mid-70s to low 80s. Planting activity was getting underway, but was slowed by unseasonably cool weather late week. According to the NASS Crop Progress Report, planting advanced to six percent in Georgia, four in Alabama, and one percent in North Carolina. Outside activities were uninterrupted and producers applied fertilizer, burn down chemicals, and prepared planting equipment. Extreme-to-exceptional drought conditions continued to encompass much of the cotton growing regions of southeast Alabama and Georgia. Additional moisture is desperately needed to recharge subsoil moisture, replenish irrigation ponds, and improve stream flow conditions.
South Central Markets
Spot cotton trading was inactive. Producer offerings and supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.
Warm temperatures early in the week gave way to unseasonably cool temperatures late in the week as a cold front brought overnight lows in the mid 30s to the region. Producers continued to prep land and equipment for planting, which was not expected to get underway for at least a week to 10 days. Although soil moisture conditions were rated at mostly adequate to surplus throughout the region, local experts reported that producers in drier areas were hoping for timely rains to provide sufficient topsoil moisture at planting depth to promote good seed germination.
Spot cotton trading was inactive. 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.
A cold front brought unseasonably cool temp- peratures and light rain showers just as producers were getting started planting. The precipitation delayed fieldwork, but supplied beneficial moisture. Local experts also reported that the warm, moist weather in the days and weeks that preceded the cold front has been beneficial to weeds and insects. This will require an intensive crop protection management strategy on the part of producers as the planting season moves forward. Planting was expected to increase rapidly over the next week.
Spot cotton trading was slow. Supplies were moderate. Demand was light. Average local spot prices were weak. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was slow. No domestic mill activity was reported. Foreign mill interest was moderate.
In central and eastern Texas, planting was underway. Seedling stands emerged in the Blackland Prairies. Severe thunderstorms brought precipitation and slowed field preparations. In southern Texas and the Rio Grande Valley, planting neared completion. Stands were established under mostly clear, sunny conditions. Planting expanded in the Upper Coastal Bend. In western Kansas, beneficial precipitation reduced droughty conditions and fieldwork was underway. Irrigated acres are expected to increase in western Kansas. In southwest Kansas, dryland acreage that failed last year was mostly planted to wheat. According to local reports, dryland acreage will be down significantly in this area. In southwestern Oklahoma, spring rainfall reduced droughty conditions, but more precipitation is needed to fortify subsoil moisture. Producers prepared seedbeds and applied fertilizer.
Spot cotton trading was slow. Supplies were heavy. Demand was light. Average local spot prices were weak. Producer offerings were light. No forward contracting was reported. Some shippers offered bale contracts, but no contracts were signed. Trading of CCC-loan equities was slow. Foreign mill interest was light.
Intermittent thunderstorms brought rainfall and hail to some parts of the High Plains. Fieldwork pro- gressed during sunny conditions with temperature highs in the mid-70s to low 80s. Producers pre-watered ahead of planting and applied herbicide. No planting was reported.
Desert Southwest (DSW)
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 steady and mostly for discounted qualities or heavily reduced cotton. Interest was best for old-crop cotton.
Spring temperatures were in the 80s to 90s for Arizona. Clear, warm conditions allowed planting to progress in western Arizona and expand into the central region. Planting was virtually completed in Yuma and Parker areas. Industry representatives reported that young cotton plants were thriving under excellent weather conditions. Ginning continued in Arizona. Temperatures were in the mid-to-high 80s in New Mexico and El Paso, Texas. Spotty thunderstorm activity produced little moisture for the area. Drought conditions continued.
San Joaquin Valley (SJV)
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 for 2011-crop cotton were light and most were interested in long staple roller-ginned cotton. Some mills inquired for California Upland and a few old-crop sales were reported.
Temperatures were in the mid-80s early in the period. Initial planting had begun in southern Kern County, but was delayed by rain late in the period. Thunderstorms brought strong winds, hail, and one-half of an inch to one inch of rainfall to the central Valley. Industry representatives estimated that less than 10 percent of the crop had been planted. Field preparations were completed for organic plantings.
American Pima (AP)
Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were steady and mostly for the purpose of price checking. Some mills inquired for 2010-crop cotton.
Temperatures were mostly in the 80s to 90s in the far west. No moisture was recorded in Arizona. Planting was virtually completed in Yuma. Seedlings were up to a good stand. Drought conditions continued in New Mexico and El Paso, Texas. Wet weather delayed plantings in the San Joaquin Valley (SJV). Strong winds and hail accompanied thunderstorms that deposited one-half of an inch to one inch of rain in the SJV late in the period. Industry representatives estimated that approximately 30 percent of the crop was planted in the Valley, mostly in southern Kern County. SJV organic producers were waiting for fields to dry to begin planting.
Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 for third quarter fill-in needs. Mill buyers also made inquiries for 2012-crop cotton, color 41, leaf 4, and staple 34 for delivery January through December 2013. No additional sales were reported. Demand for polyester-cotton blend yarn remained good. Most mills operated on a four to seven day schedule.
Inquiries through export channels were moderate. Demand was good for any discounted or low-grade styles of raw cotton.
Regional Price Information
A light volume of color mostly 31, leaf 3 and 4, staple mostly 38, mike 35-42, strength 30-32, and uniformity 80-82 sold for around 50 points off ICE May futures, FOB car/truck (Rule 5, compression charges paid).
Mixed lots containing color mostly 41 and 51, leaf 5 and better, staple 33 and longer, mike 43-52, strength 29-31, and uniformity 80-82 sold for 500 to 575 points off ICE May futures, FOB car/ truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
South Central Markets
No trading activity was reported.
No trading activity was reported.
In Oklahoma, a light volume of color 41, leaf 3, mostly staple 33, mike 43-47, strength 27-31, and uniformity 78-80 sold for around 75.00 cents per pound, FOB car/truck (compression charges not paid).
A light volume of mixed lots of color mostly 32 and 43, leaf 3 and 4, staple 35 and longer, mike 35-38, strength 30-33, and uniformity 79-82, with 75 percent bark sold for 72.00 to 73.50 cents, same terms as above.
A light volume of CCC-loan equities traded for 22.50 to 25.00 cents.
A light volume of color mostly 22 and better, leaf 2 and 3, staple 37, mike 30-36, strength 30-31, and uniformity 81-82 sold for around 80.00 cents per pound, FOB car/truck (compression charges not paid).
A light volume of 2010-crop cotton of color 21 and better, mostly leaf 3, staple 35 and longer, mike 29-34, strength 29-31, and uniformity 79-81 sold for around 75.00 cents, same terms as above.
A light volume of CCC-loan equities traded for around 27.00 cents.
No trading activity was reported.
San Joaquin Valley
No trading activity was reported.
A moderate volume of color 1, leaf 1, and staple 48 was sold to foreign mills.
The following information was excerpted from the World Agriculture Supply and Demand Estimates released April 10, 2012
This month’s 2011/12 U.S. cotton supply and demand estimates include lower production and higher exports, resulting in a decrease of 500,000 bales in forecast ending stocks. Production is reduced 119,000 bales based on USDA’s Cotton Ginnings report, released March 23, 2012, while exports are raised 400,000 bales, reflecting very strong shipments in recent weeks. Domestic mill use is unchanged. Ending stocks are now forecast at 3.4 million bales, equivalent to an ending stocks-to-use ratio of 23 percent. The forecast range for the average price received by producers of 89 to 93 cents per pound is raised 1 cent on the lower end.
The forecast for 2011/12 world cotton ending stocks is raised sharply this month, due partly to historical adjustments for India that increase beginning stocks by 3.25 million bales and ending stocks by 1.6 million bales. Analysis of India’s reported exports for the months of August-December 2011 indicates that stocks were significantly higher on August 1, 2011, than estimated previously. In addition, the government of China’s accumulation of cotton in the national reserve is constraining free supplies, thereby boosting its imports while limiting consumption. As a result, China’s stocks are raised 3 million bales to
23.1 million, a level that assumes minimal release of reserve stocks before the end of the marketing year on July 31. China’s forecast ending stocks now account for 35 percent of world stocks.
World production for 2011/12 is reduced about 500,000 bales, as reductions for India, the United States, and others are partially offset by increases for Pakistan and Sudan. World consumption is reduced 1.0 million bales, due to the reduction for China, and is now estimated at 6 percent below 2010/11. Adjustments to world trade reflect a 2.0-million-bale increase in China’s imports to a record 20.5 million, combined with increases for Malaysia, Indonesia, and Vietnam, partially offset by a decrease for Pakistan. Exports are raised for India, the United States, Pakistan, and Brazil.