USDA – Weekly Cotton Market Review: January 4, 2012

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Spot cotton quotations averaged 104 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 70.94 cents per pound for the week ended Thursday, January 3, 2012. The weekly average was down from 71.98 cents last week, and from 90.03 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 70.65 cents on Friday, December 28 to a high of 71.10 cents on Thursday, January 3. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 3 totaled 40,902 bales. This compares to 42,913 bales last week and 32,482 bales reported a year ago. Total spot transactions for the season were 1,023,767 bales, compared to 416,012 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 75.39 cents, compared to 76.01 cents last week.

Prices are in effect from January 4-10, 2013 
Adjustment World Price (AWP) 62.86 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.73 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.93 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #21 FOR UPLAND COTTON January 3, 2013

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 January 10, 2013 allowing importation of 14,776,787 kilograms (67,869 bales) of upland cotton.

Quota number 21 will be established as of January 10, 2013, and will apply to upland cotton purchased not later than April 9, 2013, and entered into the U.S. not later than July 8, 2013. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period August 2012 through October 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 active. Supplies were heavy.

Demand was good. Producer offerings were heavy.

Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013. Trading of CCC-loan equities was slow.

Partly cloudy and overcast conditions prevailed much of the extended two-week reporting period and widespread precipitation was received in areas from south Alabama to Virginia. Localized rainfall interrupted fieldwork; accumulation totals varied from trace amounts to around one inch (day-to-day). The wet weather improved soil moisture and reduced droughty conditions. However, an extended period of consistent rainfall is needed to reduce long term moisture deficits throughout the region. Daytime high temperatures in the mid-50s to mid-60s were observed in most areas, occasionally warming into the low 70’s in Alabama and Georgia. Ginning continued in south Alabama and Georgia. Several gins in North Carolina and Virginia completed pressing operations for the season; others had reduced operating schedules. In South Carolina, most gins planned to continue pressing operations into February. Producers considered planting options for 2013 and made plans to attend annual meetings. Local experts continue to report a decline in cotton acreage for 2013 is anticipated.

South Central Markets

North Delta

Spot cotton trading was inactive. Producer offerings were light. Demand was light. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013.

Trading of CCC-loan equities was inactive.

Seasonably cold temperatures dominated the weather pattern during the two-week holiday period.

High temperatures ranged from mid-40s to the mid60s and the overnight lows were mostly in the low 20s to mid-30s. A series of rain showers produced approximately two inches of precipitation. Approximately one inch of snow fell the day after Christmas.

The precipitation helped restore the depleted soil moisture profile. No outside activities were reported.

South Delta

Spot cotton trading was inactive. Producer offerings were light. Demand was light. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013.

Trading of CCC-loan equities was inactive.

 Warm weather early in the two-week period gave way to freezing temperatures later in the period. High temperatures in the mid-60s gave way to daytime highs in low 40s. Overnight lows ranged from mid30s to the mid-20s. Approximately two inches of much-needed moisture fell during the period. No outside activities were reported. Producers were carefully monitoring commodity prices as they looked ahead to spring planting options.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies were moderate. Demand was slow. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013.

Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was inactive.

Foreign mill inquiries were moderate.

In central and southern Texas, some producers applied fertilizer and prepped fields the week of December 24. Widespread rainfall halted fieldwork for most of the week ending January 3 as slow, soaking precipitation helped to fortify sub-soil moisture. Two gins continued pressing operations in these areas, but were expected to finish next week.

 According to the U.S. Drought Monitor, 100 percent of Kansas and Oklahoma were in severe, extreme, or exceptional drought conditions. Fields in both states are in need of a period of wet weather to improve sub-soil moisture levels. In south central Kansas, irrigated acreage averaged 1,800 to 2,000 pounds of lint per acre for longer season seed varieties.

One gin completed the season, but other gins continued pressing the backlog of modules. Kansas received four inches of snow the week ending December 27 that helped to improve sub-soil moisture levels.

Oklahoma received two to four inches of snow in the same week. According to the local reports, some pivot and drip irrigated fields yielded up to three and onehalf bales per acre, and limited furrow irrigated fields yielded around one bale per acre in Oklahoma. Substantial dryland acreage failed because of the prolonged drought.

 West Texas

Spot cotton trading was active. Supplies were heavy. Demand was heavy. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013. Producer offerings were heavy. No forward contracting was reported. Trading of CCC-loan equities was slow. Foreign mill inquiries were moderate.

 A storm the week of December 24 brought one to three inches of snow to the Lubbock Classing Office territory that helped to dampen the soil, minimized blowing dirt and allowed producers to work the fields. Rain was also received that further helped to replenish sub-soil moisture, but not enough to curtail droughty conditions. No delays were experienced at the few gins that continued to operate. A few gins continued pressing operations in the Lamesa Classing Office territory. Some producers attempted to plow fields and cut stalks, but more rain was needed to moisten soils to make it easier to pull equipment through the fields. Some modules remained in the fields waiting transportation to the gins. The Abilene Classing Office continued one-shift operations with about 15 gins submitting samples for grading. No significant rain or snow was received in this territory. Less than 500 acres remained to be harvested.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive during the past two weeks. Supplies and demand were moderate. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013. No forward contracting or domestic mill activity was reported.

Daytime highs were in the high 50s to mid-60s for the past two weeks in Arizona. Lows were in the high 30s for week ending January 3. Ginning continued. A winter weather advisory for light-to-moderate snowfall was issued for southern New Mexico and El Paso, Texas as a cold front moved through the area late in the period.

Low temperatures were in the high teens to low 30s. Ginning continued in New Mexico and was completed in El Paso, Texas.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were higher for the week ending December 27, 2012, but lower for the week ending January 3, 2013. No forward contracting or domestic mill activity was reported. Merchants were busy processing paperwork and paying growers.

Beneficial rain and snow were received for the week ending December 27. Fresno and Tulare Counties received approximately one-half of an inch of rainfall. Since the water year started on July 1, 2012, Bakersfield has received three-quarters of an inch of rainfall, which is well below the annual average for this time of year.

Fresno recorded three and three-tenths of an inch for the season, which brought moisture conditions to normal.

The first snow survey was taken on January 2. The state Department of Water Resources measured more than four feet of snow accumulation in the northern Sierra Nevada Mountain range, which is near normal. The SJV was under a freeze watch for several days the week ending January 3. A couple of Kern County roller gins were closed, due to a natural gas shortage in the two-week reporting period. One saw gin remained in operation and roller ginning continued.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were steady. Producers made inquiries for 2013-crop contracting. No contracts were signed.

Temperatures were cold in the far west. Freeze warnings and winter advisories were posted for the week ending January 3, 2013. New Mexico and El Paso, Texas received snow late in the period. Snowfall was welcomed as this area remains dry. Ginning continued in the region, with the exception of the El Paso, Texas gin, which was completed for the season. A natural gas shortage stopped ginning in Kern County for at least two weeks.

Textile Mill

Report Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 for June through Septem-

ber delivery. Demand was also good for discounted styles of cotton such as color 42 and 51, leaf 5 and better, and staple 32 and longer for nearby shipment. Domestic cotton shippers were hesitant to offer these lower grade qualities for sale, due to the predominance of higher quality grades of cotton in the overall crop. No sales were reported. Demand for ring-spun and open-end yarn was moderate.

 Inquiries through export channels were moderate. Representatives for mills in Thailand inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 for February/March shipment. Taiwanese mill buyers inquired for a moderate volume of color 31, leaf 3, and staple 36 for January shipment. Demand was also good for any discounted or low grade qualities of raw cotton for nearby shipment.

Regional Price Information

Southeastern Markets 

For the week ending December 28, a moderate volume of color 21 and 31, leaf 2 and 3, staple 35-38, mike 35-49, strength 27-30, and uniformity 81-83 sold for 76.50 to 78.25 cents per pound, FOB car/ truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

A heavy volume of color 31 and 41, leaf 2-4, staple 34 and longer, mike 43-49, strength 28-31, and uniformity 80-82 sold for 74.00 to 76.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A light volume of color mostly 41, leaf 2-4, staple 36 and 37, mike 43-52, strength 28-30, and uniformity 81-84 sold for around 72.00 cents, same terms as above.

Mixed lots containing color 82 and better, leaf 4-6, staple 31-33, mike 50 and higher, strength 24-26, and uniformity 79-81 sold for around 53.00 cents, same terms as above.

A light volume of CCC-loan equities sold for around 8.00 cents.

For the week ending January 4, 2013, a moderate volume of color 31 and 41, leaf 3 and 4, staple 36 and 37, mike 35-49, strength 29-31, and uniformity 81-83 sold for around 75.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

A light volume of color 41, leaf mostly 4, staple 35 and 36, mike 50 and higher, strength 29-31, and uniformity 80-82 sold for around 71.00 cents, same terms as above.

Heavy volume mixed lots containing color 43 and better, leaf 3-5, staple 35 and longer, mike 35-49, strength 27-30, and uniformity 80-83 sold for around 75.00 cents per pound, FOB car/truck (Rule 5, compression charges.

South Central Markets

North Delta 

No trading activity was reported.

South Delta 

No trading activity was reported.

Southwestern Markets

East Texas

For the week ending December 28, in Oklahoma, a light volume of color 21, leaf 3, staple 34 and longer, mike 41-43, strength 29-30, and uniformity 79-81 sold for 70.50 to 71.00 cents per pound, FOB car/truck (compression charges not paid).

A light volume of color 21 and better, leaf 2 and better, staple 37 and longer, mike 30-35, strength 30 -34, and uniformity 78-82 sold for around 68.50 cents, same terms as above.

For the week ending January 4, 2013, a light volume of color mostly 32, leaf 3 and 4, staple 33, mike 45-49, strength 26-31, and uniformity 79-81 sold for around 63.00 cents, same terms as above.

West Texas

For the week ending December 28, a moderate volume of color mostly 21 and 31, leaf 3 and better, staple 34 and longer, mike 45-53, strength 26-32, uniformity 77-81, and 75 percent bark sold for around 71.00 cents per pound, FOB car/truck (compression charges not paid).

A heavy volume of mixed lots containing color 31 and better, leaf 3 and better, staple 34 and longer, mike 35-41, strength 27-31, uniformity 78-80, and 25 percent bark sold for 69.00 to 70.00 cents, same terms as above.

A light volume of color 21, leaf 3, staple 35, mike 32-42, strength 28-30, and uniformity 81-82, sold for around 64.50 cents, same terms as above.

For the week ending January 4, 2013, a light volume of color 21, leaf mostly 1 and 2, staple 35 and longer, mike 30-49, strength 26-28, and uniformity averaging 80.00, sold for around 72.00 cents, same terms as above.

A heavy volume of CCC-loan equities traded for four to seventeen cents.

Western Markets

Desert Southwest 

No trading activity was reported.

San Joaquin Valley

No trading activity was reported.

American Pima 

No trading activity was reported.

Source: USDA

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