Average spot cotton quotations were just over 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 67.98 cents per pound for the week ended Thursday, August 16, 2012. The weekly average was down from 70.66 cents last week and 103.54 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 68.71 cents on Friday, August 10 to a low of 67.14 cents on Monday, August 13. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 16 totaled 5,926 bales. This compares to 9,575 bales last week and 3,032 bales reported a year ago. Total spot transactions for the season were 17,889 bales, compared to 3,974 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 72.37 cents, compared to 75.59 cents last week.
Prices are in effect from August 17-23, 2012 Adjustment World Price (AWP) 63.14 ELS Competitiveness Payment 0.00 Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.94 Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 1.14 Source: Farm Service Agency, FSA, USDA
A USDA ANNOUNCES SPECIAL IMPORT QUOTA #1 FOR UPLAND COTTON August 16, 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 August 23, 2012, allowing importation of 13,516,971 kilograms (62,083 bales) of upland cotton.
Quota number 1 will be established as of August 23, 2012, and will apply to upland cotton purchased not later than November 20, 2012, and entered into the U.S. not later than February 18, 2013. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2012 through June 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.
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 precipitation was received in areas throughout the region during the week. Weekly accumulated precipitation totals measured one-half of an inch to two inches in localized areas from coastal Alabama to the Carolinas. Daytime high temperatures prevailed mostly in the mid-to-high 80s, but warmed to the low 90s late week. Producers in south Georgia reported boll-rot and hard-locked bolls in some fields that had received the heaviest rainfall in recent weeks.
These wettest areas throughout the region would benefit from a period of clear and dry weather to advance the crop. Boll setting rapidly neared completion and bolls were beginning to crack open in the earliest planted fields, according to the National Agricultural Statistics Service Crop Progress Report. In south Alabama and Georgia tobacco budworm infestations were reported in some fields of conventional cotton and producers applied sprays as weather permitted. In most other areas, insect pressure was generally light and easily controlled. Producers began evaluating maturing fields and considered terminating insecticide treatments.
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.
Cooler temperatures dominated the weather pattern during the week. Daytime highs were mostly in the mid-90s. Overnight lows were mostly in the low 60s.
Scattered showers brought up to one inch of rain to localized areas, but the U.S. Drought Monitored reported that droughty conditions expanded slightly in the region. The cooler temperatures provided much needed relief from the extremely high heat indexes experienced during most of July. The irrigated portion of the crop made good progress, and the number of acres that no longer required crop protection chemicals increased sharply. The National Agricultural
Statistics Service estimated that boll opening had reached 10 percent in Arkansas and 9 in Missouri. No open bolls were reported in Tennessee. Some small, dryland fields were defoliated in Arkansas, with more to follow in a week or so. Producers continued monitoring irrigated fields for spider mites and bollworms; a few fields were treated for plant bugs.
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 slow. No forward contracting was reported.
A cooler trend brought daytime temperatures in the upper 80s and up to one inch of rain to isolated areas.
Nighttime temperatures in the mid-60s provided relief from the scorching temperatures which had prevailed for several weeks. According to the National Agricultural Statistics Service, boll opening was estimated at 34 percent in Louisiana and 11 percent in Mississippi.
Some defoliation was reported to have occurred on a few small, dryland fields with more to follow in a few days. Widespread defoliation was not expected to be underway for about two weeks. Irrigated fields were monitored for bollworms, spider mites, and plant bugs although a rapidly expanding amount of acreage was past the point where economic damage from insects could occur.
Spot cotton trading was moderate. Supplies were light. Demand was light. Average local spot prices were lower. Producer offerings were moderate. No forward contracting was reported. Trading of CCC loan equities was slow. Foreign mill inquiries were light. Interest was best from China and Korea.
The Abilene Classing Office classed the first samples of the 2012-crop year from central Texas.
Harvesting was underway and ginning activities increased with more than four gins initiating operations.
Heavy showers soaked some central and east Texas fields briefly delaying harvesting activities. The bolls were cracked open and harvest aids were applied in preparation for stripper-type harvesting on later-planted fields. The Corpus Christi Classing Office received samples from the Upper Coast and expanded the sample hauling route to gins in that area. Producers in the Winter Garden area initiated harvesting and had begun to accumulate modules at the gins. Most of the Rio Grande Valley dryland was harvested. Irrigated fields neared completion; clear weather allowed harvesting to quickly progress. The remaining modules were transported to the gin yards for processing. In Kansas, local reports indicated that prolonged high temperatures in the 100s and a lack of rainfall caused fruit shed on dryland acreage, significantly reducing yield potential. The irrigated fields advanced and producers anticipated a high producing crop. Insect problems were light, but herbicide resistant weeds posed problems. In Oklahoma, yields and production are expected to be disappointing on most fields because of excessively high temperatures and a lack of rainfall. Many fields were expected to be released to insurance around mid-September. Some irrigated acreage that had available water advanced and is expected to make better yields. Stink bugs were treated in isolated areas, but most pests were controlled by beneficial insects.
Spot cotton trading was moderate. Supplies were light. Demand was light. Average local spot prices were lower.
Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was moderate.
Foreign mill inquiries were light. Interest was best from China and Korea.
Crop conditions remained in varying stages and hinged mostly on the amount of timely moisture received before and during the growing season. Irrigated fields continued to advance with some acreage blooming, while most had reached cutout indicating that no more viable fruit would be set. Recent high temperatures around the 100s and a lack of precipitation was a game-changer for most dryland acreage that had not received mid-season rainfall. Most dryland fields had bloomed out of the top and reached hard cutout, signaling that no more blooms would be produced. The dryland acreage that had received rainfall advanced normally in isolated counties, but these fields were spotty and limited. Some intermittent rain showers occurred during the week that offered the crop relief from heat stress. According to the FOCUS on South Plains Agriculture Newsletter released on August 10, crop specialists continued to report fields affected with Fusarium wilt, root-knot nematodes, and Verticillium wilt. Plant-growth regulators were applied to some irrigated fields.
Organic acreage was rated mostly fair to poor, and approximately 25 percent had been abandoned. More abandonment is expected after mid-September following the evaluations of insurance adjusters. Although abandonment levels are expected to trend above average, the production projection is around 50 percent more than the previous year.
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.
Triple-digit temperatures continued throughout the region. For two days high daytime temperatures reached 115 degrees. At this time, the intense heat had little effect on plants as most fields were past peak bloom and boll retention was good in Yuma, Arizona. Initial harvesting began in Yuma. Ginning was expected to begin by September 1. Producers continued to manage heat stress of plants by irrigating in central Arizona. Hot conditions increased insect pressures, but pests were easily controlled. Cotton plants will get a break next week as high temperatures are forecasted to be in the low to mid-100s.
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 were mostly for prompt shipment.
A one-day high of 111 degrees was reached early in the reporting period. It is unknown at this time how the extreme temperatures affected plants. Some fields were past peak bloom and boll retention was good. Some shedding was reported in late-planted fields.
American Pima (AP)
Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local prices were steady. No forward contracting was reported. Foreign mill inquiries increased and were mostly for the purpose of price discovery. Interest was best from Bangladesh, India, and Pakistan for 2011-crop cotton. Shippers offered new-crop cotton to foreign mills. No new-crop sales were reported.
The heat wave continued in the far west. Temperatures in Arizona reached over 110 degrees and in the mid-tohigh 100s for the San Joaquin Valley. As a general rule, AP cotton can withstand higher temperatures and no negative effects were reported. Most fields were past peak bloom. Producers irrigated fields to manage heat stress of plants. Defoliation continued and initial harvesting began in Yuma, Arizona. Testing of gin equipment will begin around August 27. The crop made good progress in the far west.
Domestic mill buyers inquired for a light volume of color 41, leaf 4, and staple 34 for prompt through nearby fill-in needs. Mill buyers also inquired for a light volume of 2012-crop cotton, color 41, leaf 4, and staple 34 for January through March 2013 delivery. No sales were reported. The undertone from mill buyers remained cautious as they attempted to balance raw cotton needs with finished product orders entering 2013. Most mills operated on a five-to-seven day schedule.
Inquiries through export channels were moderate. Turkish mill buyers purchased a moderate volume of USDA Green Card Class, color 41, leaf 4, and staple 34 and longer for nearby shipment. Demand also remained good throughout the Far East for any discounted or low-grade varieties.
The following information was excerpted from the Cotton and Wool Outlook released August 13, 2012
World Cotton Stocks Rising to Record
The latest U.S. Department of Agriculture (USDA) estimates for 2012/13 project that global cotton stocks are expected to reach a new record at 74.7 million bales, 10 percent above 2011/12. Stocks have risen as a result of: 1) the recent record cotton prices that encouraged cotton production but reduced mill demand for the fiber; and 2) China’s cotton policies that are supporting domestic prices above world market clearing levels.
While global cotton stocks will increase for the third consecutive season, the stock growth has largely occurred in China. In 2010/11, China’s 23-percent share of world stocks was its lowest in two decades, and extensive purchases to rebuild its national reserve began. By the end of 2012/13, China’s share is projected to double to 46 percent, nearly matching the share of stocks held by all other foreign countries combined. A policy change by China’s Government will be needed to make these stocks available to the market.
Regional Price Information
Mixed lots containing color 42 and better, leaf mostly 3 and 4, staple 34-36, mike 35-52, strength 27-30, uniformity 79-81, and containing approximately 30 percent prep sold at around 72.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
South Central Markets
No trading activity was reported.
A moderate volume of CCC loan equities traded for around ten cents per pound.
In Texas, a moderate volume of even-running lots of new-crop cotton containing color 21 and 31, leaf 2 and 3, staple 35 and longer, mike 43-47, strength 27-31, and uniformity 80-82 sold for around 77.00 cents per pound, FOB warehouse (compression charges not paid).
A light volume of color 41 and 31, leaf 3 and 4, staple 35, mike 44-49, strength 29-33, and uniformity 81-83 sold for around 75.00 cents, same terms as above.
A light volume of 2011-crop cotton containing color 12, leaf 2 and better, staple mostly 37, mike 43-46, strength 27-28, and uniformity 80-82 sold for around 71.25 cents, same terms as above.
In Oklahoma, a light volume of mostly color 42, leaf 3 and 4, staple 35, mike averaging 43.4, strength averaging 31.6, and uniformity averaging 80.4 sold for around 57.50 cents, FOB car/truck (compression charges not paid).
A light volume of CCC-loan equities traded for around six cents.
A moderate volume of 2011-crop cotton containing mostly color 22, leaf 2 and 3, staple 35 and 36, mike 35-41, strength 31-33, and uniformity 80-82 sold for around 71.00 cents per pound, FOB car/truck (compression charges not paid).
A moderate volume of color mostly 21 and better, leaf 2 and better, staple 33 and longer, mike 42-49, strength 2731, and uniformity 79-81 sold for around 68.75 cents, same terms as above.
A moderate volume of color mostly 11, leaf 3 and 4, staple 37 and longer, mike 24-26, strength 27-31, and uniformity 77-82 sold for around 60.75 cents, same terms as above.
Mixed lots of old-crop cotton containing a light volume of color 12 and better, leaf 2 and 3, staple 35, mike 33-40, strength 31-32, and uniformity 80-81 sold for around 70.00 cents, same terms as above.
A moderate volume of CCC-loan equities traded for six to fourteen cents.
No trading activity was reported.
San Joaquin Valley
No trading activity was reported.
No trading activity was reported.