USDA – Weekly Cotton Market Review September 5, 2014

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Spot cotton quotations averaged 97 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton and Tobacco 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 66.07 cents per pound for the week ended Thursday, September 4, 2014. The weekly average was down from 67.04 cents last week, and from 79.45 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of
66.86 cents on Friday, August 29 to a low of 65.60 cents on Tuesday, September 2.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 4 totaled 2,917 bales. This compares to 13,668 bales reported last week and 4,344 bales reported a year ago. Total spot transactions for the season were 23,963 bales compared to 23,243 bales the corresponding week a year ago. The ICE October settlement prices ended the week at 66.77 cents, compared to 67.14 cents last week.
Prices are in effect from September 5-11, 2014

Prices are in effect from September 5-11, 2014 
Adjustment World Price (AWP) 54.40 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2013 Crop 0.31 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2014 Crop 0.21 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #4 FOR UPLAND COTTON September 4, 2014

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 September 11, 2014 allowing importation of 14,741,821 kilograms (67,709 bales) of upland cotton.
Quota number 4 will be established as of September 11 and will apply to upland cotton purchased not later than December 9, 2014, and entered into the U.S. not later than March 9, 2015. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2014 through May 2014, 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 and demand were light. Producer offerings were light.
Average local spot prices were lower. Trading of CCC-loan equities was inactive.
Mostly hot, dry conditions prevailed with daytime highs in the upper 80s to lower 90s. Around one to two inches of intermittent, localized precipitation was received early in the period throughout portions of Alabama and south Georgia. The rainfall came too late to benefit many dryland fields where bolls were rapidly cracking open. Drought stress negatively impacted yield potential in a lot of this acreage.
Defoliation and harvesting was underway in some of these earliest-planted fields. Producers reported irrigated fields maintained exceptional potential and defoliation could begin within two weeks. Fields were scouted and treated for localized infestations of plant bugs and stink bugs. Similar conditions prevailed in the Carolinas and Virginia where around one-quarter to one-half of an inch of moisture was received mid-week. The crop condition was mostly fair to good, but plants were wilting in fields where droughty conditions persisted. Bolls were cracking open and some limited defoliation could begin within the next two weeks. Scouting activity had slowed, but producers continued to monitor fields for aphids and bollworms. Late-season spider mites flared in portions of southern South Carolina, but many fields may not be sprayed as producers consider the expense of treatment against the lower price of cotton.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.
Some much needed rainfall relieved the hot, dry conditions which had dominated the weather pattern for several weeks. Over two inches of beneficial precipitation fell across the region. Daytime temperatures were in the low 90s. Overnight temperatures were in the low to mid-70s. Producers continued to monitor fields for late-season insect
pressure, which was mostly light and easily controlled. According to the National Agricultural Statistics Service Crop Progress report released on September 2, boll opening was right at the five-year average in Tennessee but lagged at least one week behind in Arkansas and Missouri. No defoliation was reported. Producers prepared equipment for the rapidly approaching harvest season.
South Delta Spot cotton trading was inactive. Supplies and 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.
Two to three inches of precipitation fell across the region during the week. The moisture was mostly beneficial and helped alleviate the dry conditions, which existed in some areas for several weeks. The rainfall will help fields in Mississippi finish without additional irrigation. Daytime temperatures were in the low 90s. Overnight temperatures were in the low to mid-70s. Defoliation was underway on early-
planted fields in Louisiana, but was not expected to commence in Mississippi for at least one more week.
According to the National Agricultural Statistics Service Crop Progress report released on September 2, boll opening was near the five-year average in Louisiana but lagged well behind in Mississippi.
Producers prepared equipment for the upcoming harvest season.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was moderate. Supplies and demand were moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate.
Interest was best from China, Indonesia, and Turkey.
Harvesting in the Upper Coast was slowed from spotty rain showers. Several counties were finished with harvesting in South Texas. Harvesting had begun in central Texas on a limited basis. Some producers continued to apply harvest aids in preparation for harvesting. Local experts reported that dryland yields were around 800 to 1,000 pounds  per acre of lint. Local reports indicated that dryland fields were harvested ahead of irrigated fields. Modules accumulated in the fields and at the gins. In Kansas, the crop progressed. Weekend rainfall was spotty, but benefited area cotton fields. Some bolls at the bottom of the plants had begun to pop open. Defoliation applications were expected to commence mid-September. In Oklahoma, the southwestern crop struggled under hot, dry conditions. Producers applied final irrigation and considered the best interval to stop watering.
West Texas

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower.
Trading of CCC-loan equities was inactive. Foreign mill inquiries were light.
Dryland fields that missed August rains were stressed. Some fields reached cut-out, as a record high temperature of 104 degrees was recorded on Monday in Lubbock. Some areas southeast of Lubbock received a trace to three-quarters of an inch of rainfall. Cooler temperatures in the low to mid-90s prevailed mid-week.
Irrigated fields advanced, and producers considered when to terminate irrigation. Some producers reported damaged fields from a hail event that occurred late last week. Cotton bolls began to pop open in localized areas.
According to local reports, glyphosate resistant weeds continued to be problematic and hoe crews have produced the best results. Insect pressures remained light.
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.
Hot, dry conditions persisted in Arizona. Harvesting gained momentum in Yuma. Ginning began mid-week.
The crop made good progress in central Arizona. Treatments were made for lygus and whitefly. Local experts advised producers to manage heat stress in late-planted fields. Producers prepared equipment for harvest. The Arizona crop conditions were mostly good to excellent according to the National Agricultural Statistics Service (NASS), Weekly Crop Report for week ending August 31. Open bolls were reported at 54 percent compared to 51 percent the previous year. This is consistent with the five-year average of 55 percent. Hot, dry conditions helped to advance the crop in New Mexico and El Paso, Texas. No moisture was recorded in the period. The New Mexico crop conditions were reported as mostly fair to excellent, according to NASS. Open bolls were reported at 10 percent compared to 15 percent the previous year. More hot weather was needed to get the crop to completion.
San Joaquin Valley (SJV)

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.
Daytime high temperatures were in the high 90s to low 100s. Nighttime lows were in the mid-60s. The crop progressed to cut-out. As more bolls are opening, producers treated fields for aphids and whitefly. Some defoliation will start next week in the most fully developed fields. This is a week to ten days earlier than normal.
American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were steady. No domestic mill activity was reported. Foreign mill inquiries were light.
The crop made excellent progress in the region. Harvesting gained momentum in Yuma, Arizona. Ginning was set to begin after the Upland ginning was completed. The crop advanced under hot, dry conditions in New Mexico and El Paso, Texas. Progress was slowed by cool, wet conditions from the previous two weeks. Some fields in the southern San Joaquin Valley were ready for first defoliation next week. The crop progressed to cutout stage.
Regional Summaries Regional Summaries Textile Mill Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 and longer for fourth quarter fill-in needs. No sales were reported. Mill buyers also inquired for similar qualities for first through third quarter 2015 delivery. Demand for denim fabric and yarn remained good and most mills continued to operate at capacity.
Demand through export channels was moderate. Buyers throughout the Far East inquired for any discounted or low grade styles of cotton.

Regional Price Information

Southeastern Markets
No trading activity was reported.
South Central Markets

North Delta

No trading activity was reported.
South Delta 
No trading activity was reported.
Southwestern Markets

East Texas
A light volume of new-crop cotton, color 21 and 31, leaf 2 and 3, staple 34 and longer, mike averaging 46.3, strength averaging 29.8, and uniformity averaging 80.8 sold for around 65.25 cents per pound, FOB warehouse (compression charges not paid).
A light volume of color 31, leaf 4, staple 36 and 37, mike 47-49, strength 31-33, and uniformity 82-84 sold for around 64.25 cents, same terms as above.
A light volume of color 21, leaf mostly 2 and 3, staple 33 and longer, mike averaging 47.0, strength averaging 27.9, and uniformity 79-81 sold for around 63.00 cents, same terms as above.
West Texas
No trading activity was reported.
Western Markets

Desert Southwest 
No trading activity was reported.
San Joaquin Valley
No trading activity was reported.
American Pima
No trading activity was reported.
Upland cotton growers in the United States had booked about 8 percent of their expected acreage by the end of August this season.
This was below the 16 percent booked through the same period last year. Contracting has been most active in the southeastern states where about 21 percent of the crop was under contract by the end of August and compares with 34 percent a year earlier.
South central states’ growers had forward contracted about 9 percent, compared with 16 percent in 2013. Southwestern states’ growers had contracted about 3 percent of the crop, compared to 4 percent last year. Growers in the western states had less than one-half of 1 percent of the crop under contract and compares with 3 percent at the end of August last year. These estimates were based on the National Agricultural Statistics Board’s Crop Production Harvested Acreage report and informal surveys made by the USDA, Agricultural Marketing Service, Cotton and Tobacco Program.

Source: USDA

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