USDA – Weekly Cotton Market Review: June 1, 2012

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Average spot cotton quotations were nearly two and one-half cents 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 66.14 cents per pound for the week ended Thursday,  May 31, 2012. The weekly average was down from 68.60 cents last week and 158.65 cents reported the corresponding period a year ago. Daily average quotations  ranged from a high of 67.59 cents on Friday, May 25 to a low of 64.86 cents  on Wednesday, May 30. Spot transactions reported in the Daily Spot Cotton Quotations  for the week ended May 31 totaled 1,027 bales. This compares to 9,859  bales last week and 3,984 bales reported a year ago. Total spot transactions for the  season were 857,399 bales, compared to 610,792 bales the corresponding week a  year ago. The ICE July settlement prices ended the week at 71.55 cents, compared  to 73.94 cents last week.

Prices are in effect from June 1-7, 2012

Adjustment World Price (AWP) 62.52 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.48 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.68 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #16  FOR UPLAND COTTON  May 31, 2012

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 7, 2012, allowing importation of 15,091,522 kilograms (69,315 bales) of upland  cotton.

Quota number 16 will be established as of June 7, 2012, and will apply to upland  cotton purchased not later than September 4, 2012, and entered into the U.S.  not later than December 3, 2012. The quota is equivalent to one week’s consumption  of cotton by domestic mills at the seasonally-adjusted average rate for the period  January 2012 through March 2012, 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.

Regional Summaries

Southeastern Markets  

Spot cotton trading was inactive. Supplies were moderate.  Demand was moderate. Producer offerings  were light. Average local spot prices were lower.  Trading of CCC-loan equities was inactive. Producer  interest in forward contracting was very light as ICE  futures continued to trend lower during the period.

Tropical Storm Beryl made landfall near Jacksonville,  Florida early in the period and remnants of the  system brought strong winds and heavy, soaking rainfall  to areas of coastal Georgia and the Carolinas.

There were some reports of flash flooding in areas  that received five to seven inches of precipitation and  wind gusts toppled trees. The moisture improved  drought conditions along the Southeast Atlantic coast,  but rainfall totals diminished as the storms drifted inland.  Planting activity was virtually complete in Alabama  and Virginia and advanced at a rapid pace elsewhere  in the region. Ideal weather conditions advanced  early season growth. Pressure from thrips was  sporadic and producers treated infestations as needed.  Seedlings were maturing rapidly and local experts reported  plants should be safe from injury from these  pests once they reach the fourth true-leaf stage. Some  fields in Alabama will have to be replanted due to  grasshoppers and slugs feeding on stands. Fieldwork  was delayed in areas of the Carolinas as producers  waited for soft soils to firm.

South Central Markets

North Delta

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.

The crop made fair progress under hot, dry conditions  which adversely affected plant development.  Plant growth ranged from first true-leaf to squaring.  The National Agricultural Statistics Service reported  topsoil moisture had declined precipitously and was  rated at 82 percent short to very short in Arkansas, 72  in Missouri, and 51 percent short to very short in Tennessee.  Local experts reported that pressure from insects  not usually seen this early in the season increased,  again due to the warm, dry weather. Produc-  ers treated fields for thrips and plant bugs and applied  herbicides and fertilizer as needed. Most areas were  urgently in need of rain.

South Delta  

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.

The crop advanced under hot, dry conditions.  According to the National Agricultural Statistics Service  (NASS), squaring was estimated at 2 percent in  Louisiana and 1 percent in Mississippi. NASS also  reported that topsoil moisture had declined compared  to the previous period and was rated at 56 percent  short to very short in Louisiana and 55 percent in Mississippi.  Producers were irrigating to compensate for  the lack of rainfall. Cotton extension specialists cautioned  producers to carefully monitor fields for 3cornered  alfalfa hoppers. There is no threshold level  for this pest, so producers are advised to treat infested  fields as soon as possible to avoid economic damage.  Producers were also advised to closely monitor square  retention in order to assess soil moisture conditions  and the effectiveness of all crop protection chemicals.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was inactive. Supplies were moderate.  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. Foreign mill interest was very  light. Interest was best from Korea and Mexico.

In Texas, stands progressed and exhibited strong  crop vigor. More general rainfall was needed in the  dryland cotton-growing areas to ensure a high yielding  harvest. Irrigation was underway. In Kansas, irrigated  stands progressed, but the dryland failed to germinate  and establish stands in most areas because of  droughty conditions. The southeastern areas around  Wellington received timely precipitation that helped  the dryland achieve stand establishment. In southwestern  Oklahoma, the irrigated stands emerged had  advanced, but water availability for continued irriga tions was limited or non-existent. Some dryland has been planted, but producers waited for rainfall before planting  more acres. In this area, most do not use well-water irrigation because the wells tend to run dry. Many producers  double-crop, planting cotton behind the wheat harvest, making the cotton crop uninsurable. Producers  maintain an open planting schedule, so planting deadlines do not apply.

West Texas  

Spot cotton trading was inactive. Supplies were moderate. Demand was very light. Average local spot prices  were lower. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities  was inactive. Foreign mill inquiries were very light. Interest was best from Korea and Mexico.

 In the High Plains mostly hot, dry conditions prevailed during a critical period for emerging dryland seedling  stands that needed moisture. Temperatures in the 90s to low 100s, coupled with 20 to 45 miles per hour  winds dried soils and presented less favorable growing conditions. Some areas in the Low Plains received heavy  rainfall and damaging hail, but generally most cotton-growing areas remained parched and needed more rainfall.  Well-irrigation was more prevalent since the soils were drying. Seedling stands emerged about six to seven days  after planting. Insurance planting deadlines expired for counties north of Lubbock. The moisture situation was  decidedly different around Abilene and San Angelo as planting activity was delayed as fields dried following isolated  heavy rainfall.

Western Markets

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 light.

In Arizona, planting activity rapidly neared completion and reports indicated some areas required replanting.  The crop progressed rapidly under clear and hot conditions with temperatures in the high 90s to low 100s. Squaring  had occurred on nearly one-quarter of the acreage according to the National Agricultural Statistical Service.  Blooming was underway in many fields in Yuma. In southern California, a low pressure system brought cooler  temperatures and light scattered rainfall to localized areas. Despite the cooler temperatures, seedlings were  emerging at a rapid pace and squaring was underway in some of the earliest planted fields.

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 were light.

Fieldwork continued uninterrupted and the crop advanced at a rapid pace. Producers monitored fields and  applied insecticides as needed.

American Pima (AP)  

Spot cotton trading was inactive. Supplies were heavy. Demand was light. Average local spot prices were  steady. No forward contracting was reported. No forward or domestic mill activity was reported. Foreign mill  inquiries were light.

The crop matured rapidly throughout the region as ideal growing conditions prevailed during the period.  Squaring was underway and blooming was reported in Yuma. Producers applied fertilizers.

Textile mill  Inquiries from domestic mill buyers were light, no sales were reported. Reports indicated most mills have covered  their immediate-to-nearby needs and demand for raw cotton was light despite sharply lower ICE futures  prices in recent weeks. Finished product demand was lackluster and a few mills had eliminated shifts in order to  reduce operating schedules. Demand for open-end yarn was slow to moderate; ring-spun yarn was slow. Some  mills had also delayed delivery of previously booked cotton to maintain balanced inventories of finished products.

 Regional Price Information

Southeastern Markets

Mixed lots containing color mostly 41 and 51, leaf 3-7, staple 32 and longer, mike 35-49, strength  28-31, and uniformity 79-81 sold for around 59.00 cents per pound, FOB car/truck (Rule 5, compression  charges paid).

South Central Markets

North Delta

No trading activity was reported

South Delta

A light volume of mostly color 41 and 51, leaf 5-7, staple 33 and longer, mike 35-49, strength 2632,  and uniformity 78-83 sold for around 59.00 cents per pound, FOB car/truck (Rule 5, compression  charges paid).

Southwestern Markets  

East Texas

In Texas, a moderate volume of mixed-lots of color mostly 31 and 41, leaf 3, staple 35 and longer,  mike averaging 50.7, strength averaging 28.3, and uniformity averaging 81.3, with 25 percent  extraneous matter (seed coat fragments, grass, and bark) sold for around 53.00 cents per pound,  FOB warehouse (compression charges not paid).

West Texas

A light volume of color mostly 11, leaf 2, staple mostly 33, mike 35-45, strength 25-30, and uniformity  79-80 sold for around 64.50 cents per pound, FOB car/truck (compression charges not  paid).

A light volume of color mostly 21 and better, leaf 2 and better, staple 33 and 34, mike 48-42,  strength 28-30, and uniformity 78-80 sold for around 61.00 cents, same terms as above.

Western Markets  

Desert Southwest  

No trading activity was reported.

San Joaquin Valley  

No trading activity was reported.

American Pima  

No trading activity was reported.

 Upland Cotton: The May index, at 157, is up 4.7 percent from April and 15 percent above last year.  The May price, at 95.10 cents per pound, is up 4.20 cents from the previous month and 11.90 cents  above last May.

Source: National Agricultural Statistics Service, NASS, USDA

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