USDA: Weekly Cotton Market Review: March 29, 2013

0
130

Spot cotton quotations averaged 245 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 82.68 cents per pound for the week ended Thursday, March 28, 2013. The weekly average was down from 85.13 cents last week, and 85.37 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 81.53 cents on Monday, March 25 to a high of 83.34 cents on Wednesday, March 27. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 28 totaled 5,082 bales. This compares to 13,446 bales last week and 57,652 bales reported a year ago. Total spot transactions for the season were 1,553,976 bales, compared to 811,409 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 88.46 cents, compared to 88.20 cents last week.

Prices are in effect from March 29-April 4, 2013 
Adjustment World Price (AWP) 72.58 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.26 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.46 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #7 FOR UPLAND COTTON March 28, 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 April 4, 2013 allowing importation of 14,776,787 kilograms (67,869 bales) of upland cotton.

Quota number 7 will be established as of April 4, 2013, and will apply to upland cotton purchased not later than July 2, 2013, and entered into the U.S. not later than September 30, 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 inactive. Supplies were moderate.

Demand was good. Producer offerings were moderate. Average local spot prices were lower.

Trading of CCC-loan equities was inactive.

Severe thunderstorms brought rain, hail, and strong wind to areas across central Alabama, the Florida Panhandle, and south Georgia early in the period. Localized power outages were reported in several areas, due to downed power lines. Severe drought conditions have been removed from the entire state of Georgia due to persistent soaking rainfall in recent weeks, according to the U.S. Drought Monitor. Subsoil moisture conditions were rated mostly adequate to surplus.

Light, scattered precipitation was received in areas of the Carolinas and Virginia as partly cloudy conditions prevailed, with daytime temperatures in the high 40s to mid-50s. The wet conditions delayed fieldwork in most areas and a period of dry and sunny weather was needed in the near term to allow saturated soils to firm. Producers were considering burn-down strategies that needed to be applied soon ahead of approaching planting activity.

 South Central Markets

 North Delta

 Spot cotton trading was slow. Demand was light.

Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported.

Scattered showers, strong winds, and cold temperatures dominated the weather pattern during the week.

About one inch of rain was reported in most areas already saturated from previous storms. Daytime temperatures ranged from the low 30s to the mid-50s, with wind chill factors in the mid-20s. Overnight lows were in the low 30s. Limited fieldwork was underway as spring planting rapidly approached. Producers were finalizing spring planting decisions. According to the National Agricultural Statistics Service’s recently released Prospective Plantings report, acreage in Arkansas is expected to drop to a record low level this season.

South Delta

 Spot cotton trading was inactive. Demand was light.

Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported.

Rain showers, cold temperatures, and gusty winds prevailed during the week. Less than one inch of rain was reported. Daytime high temperatures were in the 50s, while overnight lows ranged from the upper 20s to the upper 30s. Saturated soil conditions delayed fieldwork in some areas. Strong cotton prices may have encouraged a few producers to plant more acres than originally estimated. Producers were finalizing planting decisions. According to the National Agricultural Statistics Service’s recently released Prospective Plantings report, acreage in both Mississippi and Louisiana is expected to drop to a record low level this season.

South Western Markets

East Texas-Oklahoma

 Spot cotton trading was slow. Supplies were light.

Demand was moderate. Average local spot prices were lower. Producer offerings were light. Trading of CCC-loan equities was slow. Foreign mill inquiries were moderate. Interest was best from Indonesia, Korea, and Taiwan. Producer interest in forward contracting was good.

In south Texas, planting gained momentum. More acres transferred from grain commitments to cotton because of parched field conditions and market prices.

Planting neared completion, and some stands had emerged on irrigated fields in the Rio Grande Valley.

Dryland fields offered mixed results, with some fields failing to establish a stand. In Kansas and Oklahoma, producers applied fertilizers and weed control. Fields were irrigated. Ginning continued.

West Texas

 Spot cotton trading was slow. Supplies were light.

Demand was moderate. Average local spot prices were lower. Producer offerings were light. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate. Interest was best from Indonesia, Korea, and Taiwan. Producer interest in forward contracting was good.

Field preparations continued with temperature highs in the mid-40s to the mid-70s. Warm, sunny conditions were prevalent; although, hard freezes occurred with temperatures dipping into the teens and 20s early in the week. Producers applied fertilizers and herbicides. Irrigated fields were pre-watered to progress soil moisture.

Repair and maintenance was conducted on field equipment ahead of planting. Industry members attended meetings.

Western Markets

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.

Seedlings were up to a good stand in Yuma, Arizona. Some plants had progressed to the first true-leaf stage.

Industry representatives reported that approximately 90 percent of the crop was planted and 50 percent of the crop was germinated in Yuma. A light amount of re-planting was done in the earliest planted fields. Planting forecasts were good for central Arizona. Initial planting began in the Buckeye area and into Pinal County. The Arizona Cooperative Extension will continue to collect cotton plants to detect possible Fusarium oxysporum f.sp. vasinfectum race 4 (FOV 4). This is an early-season disease of Fusarium wilt pathogen of cotton. Extension agents reminded producers to remain vigilant in managing glyphosate-resistant Palmer Amaranth. Pleasant, warm conditions were prevalent in southern New Mexico and El Paso, Texas. Droughty conditions persisted.

According to the U.S. Seasonal Drought Outlook released March 26, the area was rated as moderate to severe.

Producers prepared equipment for planting.

San Joaquin Valley (SJV)

 Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were slow.

Warm, pleasant conditions were the norm with temperatures in the high 70s. Field activities were brisk as more producers began preparing equipment for planting. Some producers began initial planting in Kern and Kings County. The latest snow survey indicated that Sierra Nevada Mountain snowpack conditions were less than 50 percent of average. Local weather experts indicated that January-March 2013 were the driest months on record for California. The Central Valley Water Project decreased water allocations by 5 to 20 percent of requested amounts. A new in-field test kit to detect Fusarium oxysporum f. sp. vasinfectum race 4 (FOV 4) was released this month by Agdia. The field test provides positive or negative results of FOV 4 in about 30 minutes.

FOV 4 has become problematic in the SJV. There is no known cure for the disease.

American Pima (AP)

 Spot cotton trading was inactive. Supplies were moderate. Demand was good. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were steady, for current and new-crop cotton. Interest was best from China, Japan, Pakistan, and South America.

Temperatures were in the mid-70s to high 80s in the region, which advanced fieldwork. Planting was virtually completed in Yuma, Arizona. Initial planting began in the San Joaquin Valley, but stopped with the threat of showers late in the period. Dry conditions persisted in New Mexico and El Paso, Texas. Producers prepared equipment for planting.

Textile Mill Report

 Domestic mill buyers inquired for a moderate volume of 2013-crop cotton, color 41, leaf 4, and staple 34 for fourth quarter 2013 through first quarter 2014 delivery. Reports indicated most mills covered their immediate-tonearby raw cotton needs. No sales were reported. Yarn demand remained good and most mills continued to operate at capacity.

Demand through export channels was moderate. Demand was best throughout the Far East for any discounted or low-grade varieties.

Regional Price Information

Southeastern Markets

A light volume of color mostly 31 and 41, leaf 3 and better, staple 35 and longer, mike 43-49, strength 28-31, and uniformity 81-83 sold for around 250 points off ICE May futures, FOB car/truck (Rule 5, compression charges paid).

South Central Markets

North Delta

 A moderate volume of color 41 and better, leaf 4 and better, staple 35, mike 43-53, strength 27-33, and uniformity 79-83 traded at around 89.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Delta

 No trading activity was reported.

South Western Markets

 East Texas

In Kansas, a light volume of color 21 and better, leaf 2 and better, staple 36 and longer, mike 37-42, strength 27-30, and uniformity 79-82 sold for around 85.00 cents per pound, FOB car/truck (compression charges not paid).

A light volume of color mostly 21, leaf 2, staple 35, mike averaging 31.4, strength averaging 28.0, uniformity averaging 78.6, and 75 percent bark sold for around 76.50 cents, same terms as above.

In Oklahoma, a light volume of color 31 and better, leaf 2, staple 37 and longer, mike 39-51, strength 30-35, uniformity 79-83, and 50 percent bark sold for around 83.50 cents, same terms as above.

A light volume of color 31, leaf 3, staple 34 and longer, mike averaging 44.4, strength averaging 30.2, and uniformity averaging 80.7 traded at 80.25 cents, same terms as above.

A light volume of CCC-loan equities traded for 19.00 to 20.00 cents.

A moderate volume of 2013-crop cotton was forward contracted at 700 to 750 points off ICE December futures, FOB car/truck (compression charges not paid).

West Texas

 A light volume of color 31 and better, leaf 3 and better, staple 34 and longer, mike 35-40, strength 26- 32, and uniformity 78-80 sold for 80.00 to 82.00 cents per pound, FOB car/truck (compression charges not paid).

A moderate volume of mixed lots containing color 21 and better, leaf 3 and better, staple 37 and longer, mike 25-29, strength 27-33, uniformity 76-81, and 75 percent bark sold for 76.50 to 77.25 cents, same terms as above.

A light volume of color 21 and better, leaf 3 and better, staple 33 and longer, mike 32-35, strength 25- 30, uniformity 77-80, and 50 percent bark sold for around 72.50 cents, same terms as above.

A moderate volume of 2013-crop cotton was forward contracted at 700 to 750 points off ICE December futures, FOB car/truck (compression charges not paid).

Western Markets

Desert Southwest

No trading activity was reported.

San Joaquin Valley

No trading activity was reported.

American Pima

No trading activity was reported.

The following information was excerpted from the NASS Prospective Plantings report, released on March 28, 2013

All cotton planted area for 2013 is expected to total 10.0 million acres, 19 percent below last year. Upland area is expected to total 9.82 million acres, down 19 percent from 2012. American Pima area is expected to total 206,000 acres, down 14 percent from 2012.

If realized, planted area in Arkansas, Louisiana, Mississippi, New Mexico, and Oklahoma will all be record lows. As of March 24, cotton planting in Texas was 3 percent complete, 5 percentage points behind last year and 2 percentage points behind the 5-year average.

 Source: USDA

LEAVE A REPLY