USDA-Weekly Cotton Market Review: October 25, 2013

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Average spot cotton quotations averaged 142 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 78.59 cents per pound for the week ended Thursday, October 24, 2013. The weekly average was down from 80.01 cents last week, but up from 69.84 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 79.69 cents on Monday, October 21 to a low of

76.51 cents on Thursday, October 24. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended October 24, totaled 14,083 bales. This compares to 3,164 bales last week and 16,811 bales reported a year ago. Total spot transactions for the season were 64,251 bales, compared to 154,580 bales the corresponding week a year ago. The ICE December settlement prices ended the week at 79.21 cents, compared to 83.82 cents last week.

Prices are in effect from October 25-31, 2013 
Adjustment World Price (AWP) 68.14 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2012 Crop 0.74 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2013 Crop 0.89 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #11 FOR UPLAND COTTON October 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 October 31, 2013 allowing importation of 13,544,062 kilograms (62,207 bales) of upland cotton.

Quota number 11 will be established as of October 31, 2013, and will apply to upland cotton purchased not later than January 28 2014, and entered into the U.S. not later than April 28, 2014. 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 moderate. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Cool, overcast conditions prevailed in areas from Alabama to Virginia with daytime temperatures in the upper 60s to lower 70s. Light scattered precipitation dotted the region, but rainfall totals generally measured less than one-quarter of an inch in localized areas. Fieldwork advanced in Alabama, the Florida panhandle, Georgia, and South Carolina. Producers applied defoliants. Picking and ginning gained momentum. The cloudy, cool weather did little to alleviate soggy conditions which persisted in areas of North Carolina and Virginia that had received excessive moisture in recent weeks. The unfavorable conditions delayed the application of defoliants and hampered harvesting. Producers were concerned the wet weather could negatively impact fiber quality in some fields. In many areas, the crop was late and the percentage of cotton harvested lagged behind the five-year average in all states.

South Central Markets

North Delta

Spot cotton trading was slow. Supplies of available cotton were light. Demand was light.

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

Clear, cool weather allowed producers to make good progress with harvesting activities during the week. Daytime highs were in the upper 60s. Overnight lows dropped into the mid-40s. Defoliation, harvesting, and ginning were well underway throughout the region. Local experts estimated that about 20 percent of the crop had been harvested.

Ginning gained momentum in Missouri after a very slow start.

South Delta

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

Harvesting activities progressed steadily thanks to cool, clear conditions during in the week. High temperatures were in the upper 70s and overnight lows dipped into the upper 40s. Defoliation continued in Louisiana and Mississippi. Harvesting and ginning were in full swing. Producers with smaller amounts of acreage had finished for the season. Local experts reported that producers were achieving better-than-

anticipated yields, but there was some concern about the amount of high mike cotton.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Foreign inquiries were moderate. Interest was best from China, Turkey, and Vietnam.

In south Texas, moderate rainfall was received early in the week that delayed final harvesting and ginning activities. Most of the gins in the Corpus Christi Classing Office territory had completed the season, and less than five gins remained in operation.

In central Texas, harvesting and ginning passed the peak of the season, and some gins finalized operations. Intermittent rainfall slowed field activities in some areas. Harvesting and ginning had commenced in eastern Kansas, but no samples had been submitted to the Abilene Classing Office for quality classification. The fields yielded around two bales per acre, according to early industry reports.

Irrigated fields in central Kansas received freezing temperatures that helped shut-down the plants. Active harvesting in this area was expected to begin in 10 to 14 days. Local estimates indicated that 30,000 to 35,000 bales were expected across the state. Modules began to accumulate on the gin yards in Oklahoma.

Yield estimates were approximately one to one and one-half bales per acre.

West Texas

Spot cotton trading was moderate. Supplies were moderate. Demand was good. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Foreign inquiries were heavy. Interest was best from China, Turkey,and Vietnam.

Harvesting expanded, but some waited for nighttime frosts and freezes to help defoliate the plants. Some producers in the Northern High Plains delayed harvesting activities to allow the top bolls to mature and open.

Industry specialists were encouraged by the quality of the early crop. Heavy weekend rainfall in the Rolling Plains delayed harvesting activities and caused flash flooding in some fields. No crop damage was reported.

Some ginning activity was reported around San Angelo, but several gins planned to commence pressing operations on November 1 after the electric meter is read.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and demand were moderate. Average local prices were lower. No domestic mill activity was reported. Foreign mill inquiries were steady and for prompt shipment. Interest was best for color 21 and better, leaf 2 and better, and staple 36 and longer with shipment dates prior to December 20 to meet Chinese import quotas.

Some gins reduced to one shift operations in Yuma, Arizona. Ginning was expected to continue into late November. Harvesting expanded into central and eastern Arizona. Some ginning began late in the period.

Defoliation activities progressed in New Mexico and El Paso, Texas. Limited harvesting was reported. Reports indicated average yields, but cautioned that fields were variable due to lack of irrigation water. One gin began limited operations early in the period. Local experts reported improved water outlook conditions, due to late monsoon activity in September. The Visalia Classing Office started a night shift on October 21.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies of 2013-crop cotton increased. Demand was steady. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were steady and for prompt shipment. Foreign mills were active in purchasing non-US growths, mostly Indian and some Australian cotton. Interest in SJV Upland was renewed as ICE futures prices trended lower late in the period.

Harvesting continued. Ginning was full scale as all Upland gins were operating. Initial ginning began in the Sacramento Valley. The Visalia Classing Office started a night shift on October 21.

American Pima (AP)

Spot cotton trading was active. Producer offerings were moderate. Supplies of 2013-crop cotton increased.

Demand was steady. Average local prices were higher. Foreign mill inquiries were steady. Interest was best from China, Europe, and India.

Initial harvesting began in New Mexico and El Paso, Texas. No ginning was reported in Arizona, New Mexico, and El Paso, Texas. Harvesting and ginning gained momentum in the San Joaquin Valley. According to local experts, approximately 50 percent of the crop was harvested.

Textile Mill Report

Demand was good from domestic mill buyers for color 41, leaf 4, and staple 34 for prompt-to-nearby fill-in needs. Mill buyers also inquired for a moderate volume of color 42, leaf 5, and staple 34 and 35 for first and second quarter 2014 delivery. Most mills continued to operate on a five to seven day schedule. Yarn demand was moderate to good.

Demand through export channels was moderate. Representatives for mills in Vietnam inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 35 and 36 for November shipment.

Agents for mills in Taiwan inquired for a moderate volume of color 42, leaf 4, and staple 33 and longer for shipment January 2014.

Regional Price Information

Southeastern Markets

A moderate volume of color 21, 31, and 41, leaf 2-4, staple 35-38, mike 43-52, strength 28-31, and uniformity 80-83 sold for 86.00 to 86.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Central Markets

North Delta

A light volume of color 41 and better, leaf 5 and better, staple 35 and longer, mike 46-51, strength 28-31, and uniformity 80-83 traded for around 86.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A light volume of color 41 and better, leaf 6 and better, staple 34 and longer, mike 44-53, strength 27-33, and uniformity 79-84 traded for around 77.50 cents, same terms as above.

South Delta

A light volume of color mostly 41 and better, leaf 5 and better, staple 35 and longer, mike 41-51, strength 25-33, and uniformity 78-84 traded for around 84.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A moderate volume of color 41, leaf 6 and better, staple 34 and longer, mike 43-52, strength 27-30, and uniformity 78-82 traded for around 79.50 cents, same terms as above.

Southwestern Markets

East Texas

In Texas, a heavy volume of color 31 and better, leaf 3 and better, staple 36 and longer, mike 42-49, strength 27-34, and uniformity 79-83 sold for around 83.00 cents per pound, FOB warehouse (compression charges not paid).

A light volume of color 41 and better, leaf 4 and better, staple 37 and longer, mike 41-49, strength 30-35, and uniformity 80-84 sold for around 81.00 cents, same terms as above.

A light volume of mixed lots containing color mostly 41, leaf 3 and better, staple 35 and longer, mike 45-49, strength 26-30, uniformity 80-83, and 25 percent extraneous matter sold for around

79.75 cents, same terms as above.

A heavy volume of mixed lots containing color mostly 11, leaf 3 and better, staple 33 and longer, mike 45-52, strength 25-31, and uniformity 78-83 sold for around 76.25 cents, same terms as above.

West Texas

A light volume of color mostly 11, leaf 2 and better, staple 37 and longer, mike 36-41, strength 3135, and uniformity 79-81 sold for around 85.50 cents per pound, FOB car/truck (compression charges not paid).

A moderate volume of color 11 and better, leaf 2 and better, staple 36 and longer, mike 37-43, strength 29-32, and uniformity 80-82 sold for around 84.50 cents, same terms as above.

A light volume of color 11, leaf 1, staple 34 and longer, mike 38-41, strength 29-31, and uniformity 79-81 sold for around 81.00 cents, same terms as above.

A light volume of color 21 and better, leaf 3 and better, staple 38 and longer, mike 30-34, strength 32-34, uniformity 80-82, and 75 percent bark sold for around 75.00 cents, same terms as above.

Western Markets

Desert Southwest

A light volume of 2013-crop cotton, mostly color 21 and better, leaf 3 and better, staple 36 and longer sold for 84.75 to 85.00 cents per pound, uncompressed, FOB warehouse.

A light volume of color 22 and 32, leaf 3 and better, staple 35 and longer sold for 200 points off ICE December futures, same terms as above.

A heavy volume of color 31 and better, leaf 3 and better, staple 36 and longer was contracted for around 84.00 cents, same terms as above.

San Joaquin Valley

No trading activity was reported.

American Pima

A heavy volume of 2012-crop, color 2, leaf 2, and staple 46 was purchased at 165.00 cents per pound, UD free, FOB warehouse.

A heavy volume of 2013-crop cotton, color 2 and better, leaf 2, and staple 46 and longer was as sold for 170.00 cents, same terms as above.

A moderate volume of color 2, leaf 2, and staple 46 was purchased for 167.00 cents, same terms as above.

A moderate volume of color 2, leaf 2, and staple 46 was purchased for 160.00 cents, same terms as above in late September.

A moderate volume of color 2 and better, leaf 2 and better, and staple 46 and longer was sold to domestic mills for December/January shipment.

A heavy volume of color 2 and better, leaf 2, and staple 46 and longer sold for 183.00 cents landed.

A heavy volume of color 2 and 3, leaf 3 and better, and staple 46 sold for 186.00 cents landed.

 Source: USDA

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