Average spot cotton quotations were 242 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 65.06 cents per pound for the week ended Thursday, July 12, 2012. The weekly average was down from 67.48 cents last week, and 117.85 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 65.49 cents on Wednesday, July 11 to a low of 64.36 cents on Thursday, July 12. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 12 totaled 5,774 bales. This compares to 3,053 bales last week and 2,228 bales reported a year ago. Total spot transactions for the season were 884,193 bales, compared to 646,198 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 69.36 cents, compared to 70.77 cents last week.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #22 FOR UPLAND COTTON July 12, 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 19, 2012, allowing importation of 13,490,489 kilograms (61,961 bales) of upland cotton.
Quota number 22 will be established as of July 19, 2012, and will apply to pland cotton purchased not later than October 16, 2012, and entered into the U.S. not later than January 14, 2013. 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.
Prices are in effect from July 13-19, 2012 Adjustment World Price (AWP) 62.83 ELS Competitiveness Payment 0.00 Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.65 Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.85 Source: Farm Service Agency, FSA, USDA
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. Widespread showers and thunderstorms brought heavy rainfall to cotton growing areas throughout north Alabama, the Carolinas, and Virginia late in the period. Precipitation accumulations totaled one and one-half to three and one-half inches in many areas. The turbulent storms brought hail and damaging winds, which downed trees and caused power outages. Producers welcomed the moisture, which improved soil conditions and relieved drought-stressed fields. Weekly accumulated rainfall totals of around one inch or less were received in scattered areas of south Alabama and Georgia. The crop advanced rapidly under hot conditions as daytime temperatures in the mid-to-high 90s prevailed throughout the region. Cotton was blooming and boll-setting was underway in all areas. Producers considered pest and growth-management decisions.
Insect pressure was light to moderate overall; aphids and spider mites have been reported at treatable levels in most areas.
South Central Markets
Spot cotton trading was slow. Producer offerings and supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was slow. No forward contracting was reported.
A series of rain showers and thunderstorms throughout the period brought welcomed moisture and relief from high temperatures that had dominated the weather pattern for several weeks. Precipitation totals measured from three-quarters of an inch up to one and onequarter inches of rain. Local experts reported that dryland fields that received timely rainfall had a fair number of squares and bolls. The irrigated portion of the crop was in mostly good-to-excellent condition while dryland fields were mostly fair to poor. The National Agricultural Statistics Service estimated that boll setting had reached 70 percent in Arkansas, compared to 12 in Missouri, and 15 percent in Tennessee. Cotton extension specialists advised producers in Missouri and Tennessee to closely monitor fields for square shedding associated with rainfall after an extended dry period. Excessive square shedding is an indication that the plant is entering a second fruiting cycle and could require applications of plant-growth regulators to properly manage plant development. Little boll shedding was expected in Arkansas, due to the advanced state of most of the crop. Producers treated fields for spider mites and plant bugs as necessary. Most producers reported good weed control compared to this time last year. Most irrigation pumps continued to operate steadily.
Spot cotton trading was inactive. Supplies were light. 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 cooling trend brought rain showers that provided some much needed moisture and relief from the hot, dry conditions that had plagued the region for several weeks. Rainfall totals ranged from one inch up to three inches. More rain was in the forecast for the coming week. The crop made steady progress and was mostly in good-to-excellent condition, although some dryland fields in Louisiana continued to suffer. Cotton extension specialists advised producers in Louisiana to closely monitor fields for square shedding associated with rainfall after an extended dry period. Excessive square shed is an indication that the plant is entering a second fruiting cycle and could require applications of plantgrowth regulators to properly manage plant development. Producers were irrigating wherever possible. According to the National Agricultural Statistics Service, boll setting was estimated at 53 percent in Louisiana and 41 percent in Mississippi. Producers treated fields for aphids, spider mites, and plant bugs.
Spot cotton trading was slow. 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 light. In south Texas and the Upper Coastal region, isolated heavy rains were received that measured five to six inches during the week as harvest season neared. Some localized areas of the coast had received an accumulation of around 12 inches of precipitation. Industry reports indicated that yield potential was lost in some areas, because of the heavy rainfall since most fields had opened bolls. The heavy rains also wreaked havoc on grain harvest which was underway. In Kansas, cotton had begun to bloom early under warm, windy conditions. In eastern Kansas, the dryland fields were stressed and needed more rainfall. In western Kansas, which is mostly irrigated acreage, a good general rainfall was received that advanced the crop. In Oklahoma, scattered precipitation benefitted some fields, but other areas were stressed under droughty conditions and needed more moisture. According to the National Agricultural Statistics Service, the crop was rated mostly fair to good in Texas, Kansas, and Oklahoma.
Spot cotton trading was slow. 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 slow. Foreign mill inquiries were light. Widespread thunderstorms provided relief to heat-stressed plants early in the week. Rainfall measured trace amounts to two and one-quarter inches of moisture that improved parched fields for most counties. The rains were beneficial and helped advance the crop. Hot, dry conditions returned to the region mid-week and most fields neared bloom. Counties south of Lamesa reported that some fields were suffering from low vigor and droughty conditions. Some fields had been damaged from blowing sand and will be plowed under. According to the West Plains Integrated Pest Management Update released on July 11, Cochran and Hockley Counties have cotton plants from the 7 leaf stage to 17 leaves with an 85 percent square set. Fields had begun to bloom. Insect pressures remained light, but weeds were pesky and control measures were applied.
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 and for prompt shipment. Hot, dry conditions were prevalent in Arizona. Daily highs were over 110 degrees for most of the period. Late afternoon thunderstorms brought little relief as overnight temperatures were in the low 90s. Early-planted fields reached peak bloom stage. Approximately 70 percent of the crop was rated in good-to-excellent condition. No significant insect pressure was reported. Monsoon activity brought much needed moisture to cotton-growing areas of New Mexico and El Paso, Texas. Isolated afternoon thunderstorms produced approximately one-quarter of an inch up to one and one-quarter inches of rainfall in the period. Rainfall was welcomed and helped replenish sub-soil moisture. Crop progress was good and slightly ahead of the 5-year average.
San Joaquin Valley (SJV)
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 and for prompt shipment. Triple digit temperatures were in the mid-to-low 100s. Overnight lows were in the high-to-low 70s and provided some relief to the crop. Crop was progressing normally. Local experts indicated that the crop had a very good boll set on the bottom of plant. Insect pressures were moderate and easily controlled. Field activity consisted of irrigating and application of plant-growth regulators.
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. Fresh foreign mill inquiries were received. Inquiries were light and for prompt shipment. Interest was best from India and Pakistan. Triple digit temperatures dominated the region. Some isolated monsoon activity was reported in Arizona, New Mexico, and El Paso, Texas. Accumulations ranged from one-quarter of an inch to one and one-quarter inches. The crop made good progress in the far west.
Domestic mill buyers purchased a moderate volume of 2012-crop cotton, color 53 and 42, leaf 5, and staple 32 and longer for January through March 2013 delivery. Mill buyers also purchased a moderate volume of 2012-crop cotton, color 41, leaf 4, and staple 35 for March through July 2013 delivery. Inquiries were also made for a light volume of color 41, leaf 4, and staple 32-33 for August through October fill-in needs. No additional sales were reported. Reports indicated some merchants were hesitant to offer a significant volume of low-grade 2012-crop cotton this early in the season before the harvest begins. Most mills operated on a five-to-seven day schedule. Inquiries through export channels were moderate. Demand was best throughout the Far East for any discounted or low-grade styles of raw cotton.
Regional Price Information
Even-running lots containing color 31, leaf 3 and 4, staple 37 and 38, mike 35-49, strength 30-32, and uniformity 82-84 sold at around 73.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
A light volume of color 41 and 51, leaf 2-4, staple mostly 35 and 36, mike 43-52, strength 28-30, and uniformity 80-82 sold for 65.00 cents, same terms as above.
A light volume of color 41 and better, leaf 5 and better, staple 33 and longer, mike 36-44, strength 27-31, and uniformity 79-82 sold for around 69.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
A moderate volume of CCC-loan equities traded at a round 35.00 to 45.00 cents.
No trading activity was reported.
In Kansas, a light volume of color 31, leaf 3, staple 34, mike averaging 43.3, strength averaging 28.7, and uniformity averaging 79.9, with 75 percent extraneous matter (bark) sold for around 61.00 cents per pound, FOB car/truck (compression charges not paid).
In Oklahoma, mixed lots containing mostly color 41 and better, leaf 4 and better, mike 40-45, staple 35, strength 29-32, uniformity 79-82, with 50 percent extraneous matter (bark) traded for 60.00 to 62.75 cents, same terms as above.
Mixed lots of mostly color 41, leaf 2 and better, staple 32-34, strength averaging 28.5, with a small amount of bark traded for 55.00 to 57.00 cents, same terms as above.
A light volume of color 22 and 42, leaf 3 and better, staple 31 and longer, mike 39-47, strength 27 -29, and uniformity 79-81 sold for 56.00 to 57.00 cents, same terms as above.
A light volume of CCC-loan equities traded for around four cents.
A light volume of color 11 and 21, leaf 1 and 2, staple 33 and longer, mike 43-49, strength 30-32, and uniformity 80-82 sold for around 70.00 cents per pound, FOB car/truck (compression charges not paid).
A light volume of mostly color mostly 21, leaf 3 and better, staple 32-36, mike 39-46, strength averaging 28.0, with 90 percent extraneous matter (bark) traded for 60.00 cents, same terms as above. .
A light volume of old-crop cotton, containing color mostly 41, leaf 3 and 4, staple 31 and longer, mike 32-46, strength 25-28, and uniformity 77-81 sold for around 45.50 cents, same terms as above.
A light volume of CCC-loan equities traded for four to ten cents.
No trading activity was reported.
San Joaquin Valley
No trading activity was reported.
A light volume of color 2, leaf 2, and staple 46 was sold to mills in the far east.
No trading activity was reported.
The following information was excerpted from the Cotton and Wool Outlook released July 12, 2012
World Cotton Production Remains Concentrated Among Five Countries The latest U.S. Department of Agriculture (USDA) projections for 2012 indicate that global cotton production is forecast at 113.8 million bales, 7 percent below the 2011 record estimate of 122.7 million bales. Despite a 1.5-million-bale reduction from last month-due mainly to decreases in India and Pakistan-the global production forecast remains above projected consumption for 2012/13, resulting in rising world stocks for the third consecutive season.
The top five cotton-producing countries continue to account for approximately 80 percent of total world production, with 2012 projected at 78 percent. For 2012, the projected shares for China and India account for a combined 48 percent, down from recent years. Lower cotton prices resulting from rising stocks reduced 2012 area and production prospects for many producers. Although 2012 U.S. plantings are lower, harvested area and production are expected to rise from 2011’s drought-related losses.
The following information was excerpted from the World Agricultural Supply and Demand Estimates released July 11, 2012
This month’s 2012/13 U.S. cotton estimates show slight revisions in supply and offtake, resulting in marginally lower ending stocks. Beginning stocks are raised 100,000 bales to 3.3 million, reflecting a decrease for domestic mill use in 2011/12. Production for 2012/13 is unchanged at 17.0 million bales, despite a 4-percent reduction in planted area in the June Acreage report, as abandonment and yield have been adjusted based on current conditions. Forecast domestic mill use is reduced 100,000 bales based on recent activity levels. Exports are raised due to higher projected global imports and slightly reduced foreign competition. Ending stocks are now projected at 4.8 million bales. The projected range for the season average farm price is unchanged at 60 to 80 cents per pound.
Lower beginning stocks and production trim this month’s 2012/13 world stocks projection by 3 percent. World production is reduced 1.5 million bales due to decreases for India, Pakistan, and others. A reduction in India’s crop of 1.0 million bales reflects lower-than-expected planted area and slightly lower yield prospects due to the monsoon delay. Total world consumption is virtually unchanged as reductions for China and the United States are offset by increases for India, Pakistan, and Vietnam.