USDA: Weekly Cotton Market Review: June 29, 2012

admin June 29, 2012 0

Average spot cotton quotations were nearly three and three-quarter 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 66.63 cents per pound for the week ended Thursday, June 28, 2012. The weekly average was down from 70.28 cents last week, and from 134.49 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 68.72 cents on Monday, June 25 to a low of 65.22 cents on Wednesday, June 27. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 28 totaled 649 bales. This compares to 10,346 bales last week and 467 bales reported a year ago. Total spot transactions for the season were 875,366 bales, compared to 643,892 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 69.51 cents, compared to 67.25 cents last week.

Prices are in effect from June 29-July 5, 2012 
Adjustment World Price (AWP) 60.30 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.23 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.43 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #20 FOR UPLAND COTTON June 28, 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 July 5, 2012, allowing importation of 13,469,571 kilograms (61,865 bales) of upland cotton. Quota number 20 will be established as of July 5, 2012, and will apply to upland cotton purchased not later than October 2, 2012, and entered into the U.S. not later than December 31, 2012. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2012 through May 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 slow. Supplies were light. Demand was moderate. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting activity was reported.

Tropical Storm Debby made landfall on the Northwest Coast of Florida early in the period and brought days of drenching rain and flash flooding to the area before drifting back out to the open Atlantic midweek. Feeder bands brought locally heavy showers of five to seven inches to portions of the cotton growing regions of the Florida Panhandle and south Georgia. Southwest Georgia and the western Florida Panhandle received trace amounts to around two inches of scattered precipitation. Localized showers brought one to two inches of rainfall to areas of the eastern Carolinas. Hot, dry conditions persisted elsewhere in the region with daytime temperatures in the low to mid-90s. The balance of cotton was squaring in Alabama and Georgia according to the National Agricultural Statistics Service Crop Progress report. In these areas, the earliest planted fields were blooming and boll-setting was getting underway. Squaring advanced to 45 percent in Virginia, 23 in South Carolina, and 21 percent in North Carolina. Aphids were building in Alabama and the Carolinas, due to dry conditions, and producers scouted fields and applied sprays.

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.

Hot, dry conditions persisted throughout the region during the period. Daytime temperatures soared above 100 degrees and rapidly depleted soil moisture, especially on dryland fields. A general rain was needed to promote normal plant development. In spite of the decline in available soil moisture, the crop was rated at mostly good to excellent by the National Agricultural Statistics Service (NASS). According to NASS, boll setting was estimated at 16 percent in Arkansas, compared to 5 percent in Missouri. No bolls were reported in Tennessee. Producers treated fields for spider mites and plant bugs.

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 made good progress under continued hot, dry conditions. Producers were irrigating wherever possible. Rain is needed to allow the crop to advance normally. According to the National Agricultural Statistics Service, boll setting was estimated at 10 percent in Louisiana and 6 percent in Mississippi. Producers treated fields for spider mites and plant bugs as needed. Fields were being carefully monitored for aphids as populations were reported to be approaching threshold levels for treatment.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was inactive. Supplies were moderate. Demand was 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.

Hot, dry conditions dominated the weather pattern for much of south and east Texas. Daytime highs were in the mid-90s to low 100s. After three to four weeks of no significant rainfall in the lower Rio Grande Valley, dryland acreage was struggling. Local experts indicated the crop was approximately two to three weeks from cut-out stage in the earliest planted fields. Lack of rainfall and insufficient subsoil moisture had portions of the Coastal Bend crop at cut-out stage and open bolls were visible. Harvesting could begin in the next two weeks. The Upper Coast and Winter Garden area crops were progressing normally. Timely rains kept the central and east Texas crops in good shape. Dryland acreage north and west of Abilene, TX and in Oklahoma was struggling, due to intense heat and inadequate soil moisture. Rainfall was desperately needed to help advance the crop. Irrigated acreage in Kansas and Oklahoma made good progress.

West Texas

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

Temperatures were in the high 90s to low 100s with no rainfall recorded in the period. No rain was expected in the near term. Intense heat and winds stressed the dryland crop. In some areas that did not receive timely rains, dryland acreage was deteriorating. Significant moisture was needed soon to turn around the crop. Some producers made appointments for insurance adjusters to evaluate fields to determine loss. Irrigated acreage was flourishing, but stands were small.

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.

Daytime temperatures were in the high 100s in Arizona for most of the period. Bolls were setting in Yuma, Arizona. Blooming continued in central and eastern Arizona. The crop progressed normally. Hot, dry conditions prevailed in New Mexico and El Paso, Texas. According to the US Drought Monitor released June 26, the region was rated as abnormally dry to moderate drought status. Irrigation water was still being released by irrigation districts and water would be available through most of July. The crop made good progress.

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 and mostly for prompt shipment.

A low pressure system off the Northeast Coast kept Valley temperatures below normal for this time of year. Temperatures were in the low to mid-80s, which kept insect populations at bay. Local experts reported that the crop was progressing normally. Blooming continued in the south and central Valley in early-planted fields. Field activity consisted of applying plant-growth regulators and treatments for lygus.

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 light and for prompt shipment.

Hot, dry conditions were the norm for Arizona, New Mexico, and El Paso, Texas. Humidity levels were rising in Arizona with scattered late-afternoon thunderstorms developing in the region. Plants showed no signs of heat stress. Boll setting was good in Yuma, Arizona. Crop conditions were mostly fair in New Mexico and El Paso, Texas. No rainfall was recorded in the period. The crop made good progress in the San Joaquin Valley. Blooming progressed in early planted fields. No significant insect pressures were reported. Producers applied plant-growth regulators. Local representatives indicated another good growing season was underway.

Textile mill

Domestic mill buyers inquired for a moderate volume of 2012-crop cotton, color 41 and better, leaf 4 and better, and staple 34 and longer for third quarter 2012 and first quarter 2013 delivery. No sales were reported. Most mills planned four to seven days of downtime for the approaching Fourth of July holiday.

Inquiries through export channels were moderate. Representatives for mills in Ecuador purchased a moderate volume of color 31, leaf 4, and staple 32 and longer for July shipment. Taiwanese mill buyers purchased a moderate volume of color 31, leaf 3, and staple 36 for July shipment. Demand was also good throughout the Far East for any discounted or low-grade styles. No additional sales were reported.

Regional Price Information

Southeastern Markets

A light volume of color 31 and 41, leaf 2-4, staple 34 and longer, mike 37-49, strength 28-31, and uniformity 80-83 sold for around 350 points off ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

South Central Markets

North Delta