USDA – Weekly Cotton Market Review: January 25, 2012

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Spot cotton quotations averaged 335 points higher 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 75.26 cents per pound for the week ended Thursday, January 24, 2013. The weekly average was up from 71.91 cents last week, but down from 90.27 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 73.71 cents on Friday, January 18 to a high of 77.42 cents on Thursday, January 24. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 24 totaled 107,918 bales. This compares to 119,712 bales last week and 54,412 bales reported a year ago. Total spot transactions for the season were 1,301,740 bales, compared to 570,674 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 82.89 cents, compared to 77.78 cents last week.

Prices are in effect from January 25-31, 2013 
Adjustment World Price (AWP) 66.16 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 1.16 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 1.36 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #24 FOR UPLAND COTTON January 24, 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 31, 2013 allowing importation of 14,776,787 kilograms (67,869 bales) of upland cotton.

Quota number 24 will be established as of January 31, 2013, and will apply to upland cotton purchased not later than April 30, 2013, and entered into the U.S. not later than July 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 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. Trading of CCC-loan equities was inactive.

Mostly clear to partly cloudy weather prevailed during the period with daytime high temperatures in the upper 50s to mid-60s throughout Alabama, Georgia, and South Carolina. Similar conditions prevailed in North Carolina and Virginia with slightly cooler daytime highs in the upper 40s to mid-50s. Lack of moisture in recent weeks and breezy weather expanded droughty conditions throughout the Florida Panhandle.

A small number of gins still operating in North Carolina planned to complete pressing activities for the season in the next week or two. Ginning continued in Georgia and South Carolina. Ginners, producers, and merchants planned to attend annual production and trade organization meetings in the weeks ahead.

South Central Markets

North Delta

Spot cotton trading was slow. Producer offerings were light. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was active. No forward contracting was reported.

Clear skies and cold temperatures prevailed throughout the week. Daytime highs ranged from the mid-50s to the low 40s. Overnight lows were mostly in the mid-20s. The dry conditions allowed flood waters to recede from low-lying fields and infiltrate the soil profile. More precipitation is required to fully recharge soil moisture. Producers attended trade meetings and continued planning for the upcoming planting season. 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. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Seasonably cool, clear conditions dominated the weather pattern during the week. High temperatures ranged from the mid-50s to the low 70s. Overnight lows were in the low 50s early in the week, but dropped into the mid-30s at the end of the week. The break from rainy weather allowed standing water to infiltrate and help restore the soil moisture levels. Adequate soil moisture to support spring plant was reported throughout the region. Local experts reported that most producers plan to reduce cotton acreage compared to last year. Producers attended trade meetings and made plans for the upcoming planting season.

No outside activities were reported.

SouthwesternMarkets

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies were light.

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

In south Texas and the Rio Grande Valley (RGV), fieldwork preparations were mostly completed. Preemergent herbicide was applied to control weeds. Fertilizer was applied to supplement nutrients in the soil ahead of planting. Some producers opted to wait for rain before applying chemicals. Water management and stewardship of resources is a hot-topic during the prolonged droughty conditions. Local reports indicated that some water districts were out of water allocations.

The Corpus Christi area is very dry, but the RGV, Upper Coast, and the Blackland Prairies have more moisture.

Some seed was reserved with seed companies, but many producers were undecided which crop to plant. Experts expect milo prices and soil moisture in mid-February to influence planting decisions. The Abilene Classing Office continued to grade samples submitted from Kansas and Oklahoma.

West Texas

Spot cotton trading was active. Supplies were moderate.

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

Fieldwork progressed under clear, warm conditions with daytime temperatures reaching into the 70s midweek.

Producers were busy prepping fields for planting.

Pre-emergent herbicide and fertilizer were applied.

Maintenance and repairs were conducted on irrigation Regional Summaries Regional Summaries pivot systems throughout the region. Droughty conditions remained, and more precipitation is needed ahead of planting. Industry members attended meetings, and some producers began to reserve seed with seed companies.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were higher.

Foreign mill inquiries were light. No forward contracting or domestic mill activity was reported.

Ginning continued in Arizona. Arizona snowpack was above normal, but the outlook was still considered below normal for precipitation and snowfall. Temperatures warmed to the mid-to-high 60s in New Mexico and El Paso, Texas. No moisture was recorded in the period. Rainfall is needed to help replenish soil moisture. Conditions remained very dry. Ginning was completed in New Mexico and El Paso, Texas. Producers considered planting options for the 2013-crop year, as they eyed attractive futures prices for competitive crops. Industry members and producers attended regional cotton meetings.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were higher.

Foreign mill inquiries were light. No domestic mill activity was reported. Producers made inquiries for 2013crop contracts, with a few signing contracts as futures prices trended higher.

Temperatures warmed to the mid-to-high 60s, with cloud cover by mid-week. Showers passed through the Valley late in the period with trace amounts reported. No outside activities were reported. Roller-ginning continued.

Industry members and producers attended local cotton meetings.

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 light.

Ginning continued in the San Joaquin Valley. Reports indicated that ginning would be completed around mid February.

Textile Mill

Report Domestic mill buyers purchased a moderate volume of color 41, leaf 5, and staple 33 and longer for June through December delivery. Mill buyers also inquired for a moderate volume of color 42, leaf 4, and staple 32 and longer for March through May delivery. Demand remained good for any discounted or low-grade qualities of cotton.

Demand for finished products was steady. Demand for ring-spun and open-end yarn was moderate.

Inquiries through export channels were good. Agents for mills in Taiwan inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 for nearby shipment. Demand was also good throughout the Far East for any discounted or low-grade styles of cotton for immediate-to-nearby shipment.

Regional Price Information

Southeastern Markets

A moderate volume of color 31 and 41, leaf 3 and 4, staple 35-37, mike 43-49, strength 27-30, and uniformity 80-82 sold for 77.00 to 78.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A moderate volume of color 31, leaf 2 and 3, staple 35 and longer, mike 43-49, strength 28-30, and uniformity 80-83 sold for around even 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 2730, and uniformity 80-82 sold for around 125 points off ICE March futures, same terms as above.

Mixed lots containing color 52 and better, leaf 5 and better, staple 34 and longer, mike 43-52, strength 29-31, and uniformity 80-82 sold for around 600 points off ICE March futures, same terms as above.

A moderate volume of color 31 and 41, leaf mostly 3 and 4, staple 35-37, mike 43-49, strength 30-32, and uniformity 80-83 sold for around 150 points off ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

A moderate volume of color 41 and 51, leaf 3-5, staple 37 and 38, mike 50-52, strength 28-30, and uniformity 81-83 sold for around 550 points off ICE March futures, same terms as above.

South Central Markets

North Delta

A light volume of color 41 and better, leaf 5 and better, staple 33 and longer, mike 43-53, strength 27 -31, and uniformity 79-82 sold for around 72.00 cents per pound, FOB car/truck, (Rule 5, compression charges paid).

A heavy volume of CCC-loan equities traded for around 15.50 to 16.50 cents.

South Delta

No trading activity was reported.

Southwestern Markets

East Texas

In Kansas, a light volume of color 21, leaf 2, staple 33 and longer, mike 44-49, strength 28-30, and uniformity 78-80 sold for around 68.75 cents per pound, FOB car/truck (compression charges not paid).

In Oklahoma, a light volume of color 22, leaf 2, staple 34, mike averaging 37.0, strength averaging 30.0, and uniformity averaging 79.1 sold for around 65.50 cents, same terms as above.

A light volume of color mostly 54, leaf 6, staple 29, mike 28-41, strength 19-21, uniformity 76-78, and 100 percent bark sold for around 49.25 cents, same terms as above.

A heavy volume of mixed lots containing color mostly 44 and 54, leaf 5 and better, staple 29 and longer, mike 40-46, strength 19-26, and uniformity 73-78 sold for around 42.75 cents, same terms as above.

A light volume of color mostly 41, leaf 3, staple 33, mike 45-46, strength averaging 27.0, and uniformity averaging 80.5 sold for around 69.25 cents, FOB warehouse (compression charges not paid).

West Texas

A heavy volume of color mostly 31 and better, leaf 3 and better, staple 35 and longer, mike 34-49, strength 27-32, uniformity 77-82, and 25 percent bark sold for 73.00 to 74.50 cents per pound, FOB car/truck (compression charges not paid).

West Texas

A heavy volume of color 31 and better, leaf 3 and better, staple 35 and longer, mike 27-49, strength 24-32, uniformity 77-81, and 50 percent bark sold for 71.25 to 71.75 cents, same terms as above.

A moderate volume of color 31 and better, leaf 3 and better, staple 35 and longer, mike 27-42, strength 28-29, and uniformity 78-80 sold for around 65.50 cents, same terms as above.

A light volume of color mostly 22, leaf 3 and better, staple 36 and longer, mike 27-29, strength 29-32, uniformity 79-82, and 75 percent bark sold for around 58.00 cents, same terms as above.

A heavy volume of CCC-loan equities traded for nine to fifteen 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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