USDA – Weekly Cotton Market Review: May 31, 2013

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Spot cotton quotations averaged nearly three 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 76.53 cents per pound for the week ended Thursday, May 30, 2013. The weekly average was down from 79.43 cents last week, but up from 66.14 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 77.03 cents on Friday, May 24 to a low of 75.77 cents on Thursday, May 30. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 30 totaled 4,997 bales. This compares to 4,311 bales last week and 1,027 bales reported a year ago. Total spot transactions for the season were 1,638,566 bales, compared to 857,399 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 80.13 cents, compared to 81.78 cents last week.

Prices are in effect from May 31-June 6, 2013 
Adjustment World Price (AWP) 68.99 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.27 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 0.47 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #16 FOR UPLAND COTTON May 30, 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 June 6, 2013 allowing importation of 13,544,062 kilograms (62,207 bales) of upland cotton.

Quota number 16 will be established as of June 6, 2013, and will apply to upland cotton purchased not later than September 3, 2013, and entered into the U.S. not later than December 2, 2013. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2012 through February 2013, 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 slow. Supplies were light.

Demand was good. Producer offerings were light.

Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Planting activity was uninterrupted and advanced at a rapid pace under clear, warm weather conditions throughout the region. Daytime highs were in the upper 80s to lower 90s in Alabama and Georgia, with slightly more moderate temperatures in the upper 70s to lower 80s observed in the Carolinas and Virginia.

Abnormally dry conditions developed in portions of south Alabama, south Georgia, and the Florida panhandle, due to lack of moisture in recent weeks and these areas could use some additional rainfall.

Stand loss was reported in some areas of central Alabama, due to grass hoppers feeding on stems and controls were applied to fields. Insect pressure from thrips was heavy in areas of Georgia and producers applied treatments. Some replanting was underway in areas of the Carolinas and Virginia, due to standing water in fields and soggy conditions last week.

South Central Markets

North Delta

Spot cotton trading was slow. Supplies of available cotton were light. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Clear, warm weather allowed producers to make good progress sowing cotton in most areas. Low lying areas remained under water or were still too soft to support planting equipment. Both daytime and nighttime temperatures were near normal for the season. Planting was completed in some areas, due to the reduced number of acres. According to the National Agricultural Statistics Service, planting advanced to 79 percent completed in Arkansas and 93 in Missouri. Local experts reported that planting was virtually finished in the Bootheel of Missouri. In sharp contrast, planting in Tennessee advanced to 37 percent, two weeks behind the 5-year average, mainly due to wet soil conditions. No insect pressure was reported.

South Delta

Spot cotton trading was inactive. Supplies were light.

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

Trading of CCC-loan equities was inactive. No forward contracting was reported.

Ideal planting conditions during the week allowed producers to make excellent progress sowing cotton in most areas. Both daytime and nighttime temperatures were near normal for the season. Some low-lying fields remained flooded or were still too wet for field activities to resume. According to the National Agricultural Statistics Service, planting advanced to 84 percent completed in Louisiana and was expected to finish quickly. Planting in Mississippi advanced to 36 percent, nearly two weeks behind the 5-year average of 84 percent. Insect pressure from thrips was moderate and building. Fields were treated as necessary. Population levels of aphids and spider mites remained below the threshold for treatment.

Southwestern Markets

East Texas-Oklahoma

Trading of spot cotton was inactive. Supplies and demand were light. Average local spot prices were lower. Foreign mill interest was light. No forward contracting or domestic mill activity was reported.

The Lower Rio Grande Valley crop made excellent progress. Fields planted in February fast approached cutout stage. Other fields were producing squares and blooming. The crop made good progress in the Upper Coast and Winter Garden. Local experts reported that cotton plants were in various stages of development, with some of the advanced fields producing squares.

Moisture is needed to help advance the crop. Some cotton fields were zeroed out by insurance adjusters and then replanted to grain sorghum and sesame. Most dryland producers in Kansas and Oklahoma continued to wait for rain prior to planting.

West Texas

Trading of spot cotton was inactive. Supplies and demand were light. Average local spot prices were lower. Foreign mill interest was light. No forward contracting or domestic mill activity was reported.

Planting advanced under clear, sunny conditions.

No moisture was recorded in the period. High Plains producers raced to plant dryland cotton prior to the May 31 federal crop insurance deadline. Local experts estimated that approximately 60 percent of the crop was planted. Most irrigated fields were up to a stand, but needed additional moisture. Scattered showers brought some relief to fields in the Rolling Plains. Overall, conditions remained dry in the region.

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.

The crop made good progress in Arizona. Some fields were squaring. Dry, windy conditions prompted producers to irrigate fields to avoid water stress. No significant insect pressures were reported. Planting was virtually completed in New Mexico and El Paso, Texas. The drought continues to plague the area. Water districts will release water for irrigation purposes on June 1.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower.

Foreign mill inquiries were light.

The cooler weather pattern slowed crop progress. Some wind damage was reported. The first pinhead squares were sighted in the earliest planted fields.

American Pima (AP)

Spot cotton trading was inactive. Producer offerings and supplies were light. Demand was light. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Hot conditions advanced the crop in Yuma, Arizona. Some fields were squaring. Cool, windy conditions slowed progress in the San Joaquin Valley (SJV). Squaring was reported in some of the earliest planted fields.

Some March planted fields were treated with plant-growth regulators to control excessive vegetative growth in the southern SJV.

Textile Mill

Report Domestic mill buyers inquired for a heavy volume of 2013-crop cotton, color 41 and better, leaf 4 and better, and staple 34 for November through September 2014 delivery. No sales were reported. Reports indicated the earliest load out dates at many warehouses were five to six weeks. Demand for open-end and ring spun yarn was good.

Demand through export channels was moderate. Agents for mills in Taiwan bought a moderate volume of color 41, leaf 4, and staple 36 for June/July shipment. Columbian mill buyers inquired for a moderate volume of USDA Green Card Class, color 21 and 31, leaf 2 and 3, and staple 34-36 for June through November shipment.

Representatives for mills in El Salvador inquired for a moderate volume of 2013-crop cotton, color 31, leaf 3, and staple 36 for November through May 2014 shipment.

Regional Price Information

Southeastern Markets

Even-running lots containing color 31, leaf 2-3, staple 36, mike 43-49, strength 27-29, and uniformity 80-82 sold for around 85.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Central Markets

North Delta

A moderate volume of even-running lots, color 31, leaf 3 and better, staple 37, mike37-49, strength 27-29, and uniformity 80-83 sold for 85.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A moderate volume of mixed lots, color mostly 32 and 42, leaf 4 and better, staple 34 and longer, mike 50-54, strength 25-35, and uniformity 79-84 traded for around 76.75 cents, same terms as above.

South Delta

No trading activity was reported.

Southwestern Markets

East Texas

A light volume of mostly color 11 and 12, leaf 2 and better, staple 36-37, mike 45-49, and strength averaging 27.6 sold for 74.75 cents per pound, FOB warehouse.

West Texas

A light volume of color mostly 21 and better, leaf 3 and better, staple 34 and longer, mike 35-49, and strength averaging 29.5 sold for 75.50 cents per pound, 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.

 Source: USDA

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