USDA – Weekly Cotton Market Review: Oct. 26, 2012

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Spot cotton quotations were virtually unchanged from 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 69.84 cents per pound for the week ended Thursday, October 25, 2012. The weekly average was down from 69.85 cents last week, and from 97.37 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 71.95 cents on Monday, October 22 to a low of 67.91 cents on Wednesday, October 24. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended October 25 totaled 16,811 bales. This compares to 32,792 bales last week and 38,472 bales reported a year ago. Total spot transactions for the season were 154,580 bales, compared to 122,620 bales the corresponding week a year ago. The ICE December settlement prices ended the week at 72.73 cents, compared to 77.72 cents last week.

 Prices are in effect from October 26-November 1, 2012

Adjustment World Price (AWP) 63.43 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.96 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 1.16 
Source: Farm Service Agency, FSA, USDA

USDA OPENS NOMINATIONS FOR AGRICULTURE ADVISORY COMMITTEE VACANCIES

USDA, AMS, Cotton & Tobacco Programs is seeking nominations for twentyfour vacancies on the Advisory Committee on Universal Cotton Standards. The Committee’s purposes are to review the American Upland Cotton Standards and to make recommendations to USDA concerning the establishment, revision or change of the standards. Nominations must be received by November 2, 2012.

For more information and an application form please go to: http://www.ams.usda.gov/AMSv1.0/AdvisoryCommitteeonUniversalStandards

Regional Summaries

Southeastern Markets

Spot cotton trading was moderate. Supplies were light. Demand was good. Producer offerings were light. Average local spot prices were steady. Trading of CCC-loan equities was inactive.

Cool, dry conditions prevailed throughout the region.

Defoliation and harvesting activities expanded at a rapid pace. Modules were accumulating on gin yards and ginning continued uninterrupted. In Alabama and Georgia, excellent yields in excess of 1,000 pounds per acre were reported in many dryland fields.

Yields of 1,200 to 1,500 pounds per acre were common in irrigated acreage. Producers were attempting to defoliate fields ahead of unfavorable weather forecasted for early next week in the Carolinas and Virginia.

A cold front that was projected to enter the region would hamper defoliants and boll-openers. In addition, producers were cautiously monitoring Hurricane Sandy, which will brush along the coastal Carolinas over the weekend and could bring some precipitation to these areas, further delaying fieldwork.

South Central Markets

North Delta

Spot cotton trading was slow. Producer offerings were light. Supplies of available cotton were light.

Demand was light. Average local spot prices were steady. Trading of CCC-loan equities was inactive.

No forward contracting was reported.

Unseasonably warm, dry weather allowed producers to make excellent progress with harvesting. The National Agricultural Statistics Service estimated that harvesting advanced steadily to 79 percent in Arkansas, 62 in Missouri, and 59 percent in Tennessee.

Gins in the territory were operating at full capacity.

The crop was rated at mostly good to excellent. The quality of the crop in terms of the color and micronaire quality factors improved slightly compared to the season-to-date figures.

South Delta

Spot cotton trading was inactive. Supplies were light.

Producer offerings were light. Demand was light.

Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Clear, warm weather conditions allowed producers to make excellent progress towards winding down harvesting for this season in Louisiana. A cold front accompanied by rain showers late in the week was expected to slow progress for a couple of days. According to the National Agricultural Statistics Service, harvesting progressed steadily to 91 percent in Louisiana and 64 percent in Mississippi. Gins continued to operate at full capacity.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was slow. Supplies were light.

Demand was light. Average local spot prices were steady. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was slow. Foreign mill inquiries were light.

In south Texas, gins continued operations in the Upper Coast and the Winter Garden areas. Most of the fields were harvested, except in the Winter Garden area. The remaining 2012-crop was in modules waiting to be ginned. Some gins were expected to operate until the end of the year. Exceptionally high yields from dryland and irrigated acreage forced a backlog at the gins. In east Texas, some gins neared completion and sample receipts at the classing office slowed. In Kansas and Oklahoma, harvesting continued to advance.

According to the National Agricultural Statistics Service, 8 percent was harvested in Kansas and 31 percent was harvested in Oklahoma.

West Texas

Spot cotton trading was moderate. Supplies were moderate. Demand was moderate. Average local spot prices were steady. Producer offerings were light. No forward contracting was reported. Trading of CCCloan equities was inactive. Foreign mill inquiries were light.

Spotty rainfall was received in some areas that delayed harvesting activities during the weekend.

Sprayers were observed in some fields; harvesting crews in others. Overall, harvesting and ginning expanded with some gins adding multiple shifts to pace with module accumulations. The Lamesa and Lubbock Classing Offices also increased operations to two and three shift operations to manage sample receipts and maintained a steady dissemination of quality data for producers.

Low-yielding dryland and irrigated organic cotton fields were destroyed and released to insurance.

Some fields that had received adequate rainfall during the planting and growing season demonstrated strong crop vigor and had established a good boll load. Producers waited for a hard freeze to naturally defoliate the plants ahead of harvesting, which was expected in the coming days. Space was provided at the gins for storing the organic cottonseed separately from the conventional seed. The warehouse was prepared to receive organic bales and had dedicated space to separate organic bales from the conventional bales.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies of new-crop cotton were slowly increasing, as more gins began operations.

Demand was light. Average local spot prices were steady. Producers delivered previously contracted cotton. Producer recaps were offered. No new sales were reported. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Interest was best from China.

Ginning continued in Yuma, Arizona. Harvesting continued in central and eastern Arizona, New Mexico, and El Paso, Texas. Local experts estimated that approximately 20 percent of the crop was harvested in central Arizona. Early harvesting reports indicated that yields were around 2.75 to 3 bales per acre in New Mexico. Initial ginning began in New Mexico and El Paso, Texas.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies of new-crop cotton were slowly increasing, as more gins began operations.

Demand was light. Average local spot prices were steady. No domestic mill activity was reported. Foreign mill inquiries were light. Interest was best from China.

The first winter storm of the season dropped temperatures into the high 60s. Eight to ten inches of snow was received in elevations over 6,000 feet. Scattered showers brought approximately one-quarter of an inch of rain into Tulare and Fresno Counties early in the period. Harvesting was slowed briefly. Ginning gained momentum.

Modules were stored in fields and on gin yards. Early estimates suggested near record-breaking yields. Sources reported 3.5 to 4 bales to the acre, due mostly to the excellent growing season, no significant insect pressure, and no long periods of intense heat.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2012-crop cotton were light. Demand was light. Average local prices were steady. No forward contracting or domestic mill activity was reported.

A cold front moved into California dropping temperatures into the high 60s for the San Joaquin Valley. Approximately one-quarter of an inch of rainfall was received mostly in the north end of the Valley. Harvesting was slowed briefly while waiting for lint to dry. Ginning continued uninterrupted. Industry representatives reported excellent yields on first-pick cotton. Yields of 3.25 to 3.50 bales to the acre were reported. Sources indicated ideal growing conditions along with efficient irrigation sub-surface systems were contributing factors for the increase.

Temperatures in Arizona, New Mexico, and El Paso, Texas were in the high 80s and 90s. Conditions were excellent for harvesting. Ginning gained momentum in the San Joaquin Valley. Initial ginning began in New Mexico.

Textile Mill

Report Domestic mill buyers purchased a light volume of color 41, leaf 4, and staple 35 and longer for October/ November fill-in needs. Mill buyers also inquired for a moderate volume of 2012-crop cotton, of color 41, leaf 4, staple 34 and longer, and mike 43-49 for immediate to nearby delivery. Several mills had begun to spin 2012 crop cotton, and the undertone remained cautious as available supplies of desirable qualities remained a concern.

Most mills operated on a five to seven day schedule. Load out dates at some warehouses were reported at two-tofour weeks.

Inquiries through export channels were moderate. Mill buyers in Taiwan purchased a moderate volume of color 41, leaf 3, and staple 35 and longer for November shipment.

Regional Price Information

Southeastern Markets

Mixed lots containing color mostly 31 and 41, leaf 3 and 4, staple 35 and longer, mike 43-52, strength 29-31, and uniformity 80-83 sold for 73.50 to 74.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

Even-running lots containing color 31 and 41, leaf 2 and 3, staple 35 and 36, mike 47 and 48, strength 26-2, and uniformity 81 and 82 sold for around 72.00 cents, same terms as above.

A moderate volume of color 31-42, leaf 2-4, staple 34 and longer, mike 43 and higher, strength 27- 29, and uniformity 79-81 sold for around 500 points off ICE March futures, same terms as above.

A moderate volume of color 31 and 41, leaf 2 and 3, staple 35 and longer, mike 43-49, strength 27- 29, and uniformity 79-81 sold for 125 to 200 points on ICE March futures, FOB, car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

Mixed lots containing color 52 and better, leaf 3-5, staple 34-36, mike 35-45, strength 28-30, and uniformity 79-81 sold for around 67.00 cents, same terms as above.

 South Central Markets

North Delta

A light volume of old-crop cotton, color mostly 21 and better, staple 36 and longer, leaf 2 and better, mike 35-44, strength 28-32, and uniformity 80-83 traded for 74.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Delta

No trading activity was reported.

 Southwestern Markets

East Texas

In Texas, a moderate volume of new-crop cotton, color mostly 32 and better, leaf 3 and better, staple 36 and longer, mike 43-49, strength 26-33, and uniformity 79-84 sold for around 71.00 cents per pound, FOB warehouse (compression charges not paid).

Mixed lots containing color mostly 41 and better, leaf 3 and better, staple 35 and longer, mike 50-53, strength 29-32, and uniformity 81-82 sold for around 66.75 cents, same terms as above.

A light volume of color mostly 21 and 31, leaf 3 and 4, staple 36 and longer, mike 52-53, strength 32 -34, and uniformity 83-84 sold for around 64.50 cents, same terms as above.

In Oklahoma, a light volume of color 32, leaf 3 and better, staple 35, mike 35-45, strength 29-33, and uniformity 78-81 sold for around 67.00 cents, same terms as above.

A light volume of CCC-loan equities traded for eleven to fourteen cents.

West Texas

A light volume of new-crop cotton containing color mostly 21 and better, leaf 3 and better, staple 36 and longer, mike 37-52, strength 27-32, and uniformity 78-81 sold for around 75.75 cents per pound, FOB car/truck (compression charges not paid).

A moderate volume of even-running lots, of color 31 better, leaf mostly 2 and better, staple 34 and longer, strength 28-33, uniformity 78-80, with around 25 percent bark sold for 70.00 to 72.25 cents, same terms as above.

A light volume of color mostly 21, leaf 2, staple 34 and longer, mike 43-47, strength 27-30, and uniformity 78-81 sold for around 69.50 cents, same terms as above.

A light volume of color mostly 22, leaf 2, staple 33 and longer, mike 41-46, strength 26-28, and uniformity 76-78 sold for around 65.75 cents, same terms as above.

 Western Markets

Desert Southwest

No trading activity was reported.

San Joaquin Valley

A moderate volume of saw and roller-ginned Acala was contracted early in the period.

American Pima

No trading activity was reported.

 USDA ANNOUNCES SPECIAL IMPORT QUOTA #11 FOR UPLAND COTTON October 25, 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 November 1, 2012, allowing importation of 14,285,630 kilograms (65,613 bales) of upland cotton.

Quota number 11 will be established as of November 1, 2012, and will apply to upland cotton purchased not later than January 29, 2013, and entered into the U.S. not later than April 29, 2013. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2012 through July 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.

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