USDA – Weekly Cotton Market Review:  February 27, 2015 

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Average spot cotton quotations were 25 points higher 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 63.05 cents per pound for the week ended Thursday, February 26,  2015. The weekly average was up from 62.80 cents last week, but down from 82.93  cents reported the corresponding period a year ago. Daily average quotations  ranged from a low of 62.50 cents on Monday, February 23 to a high of 63.54 cents  on Wednesday, February 25. Spot transactions reported in the Daily Spot Cotton  Quotations for the week ended February 26 totaled 51,586 bales. This compares to  75,887 bales reported last week and 22,359 bales reported a year ago. Total spot  transactions for the season were 1,796,723 bales compared to 1,189,635 bales the  corresponding week a year ago. The ICE May settlement prices ended the week at  65.21 cents, compared to 64.69 cents last week.

Prices are in effect from February 27-March 5, 2015 
Adjustment World Price (AWP) 49.48 ELS Competitiveness Payment 0.00 
Loan Deficiency Payment (LDP) 2.52 Fine Count Adjustment 2013 Crop 0.67 
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2014 Crop 0.57 
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #3  FOR UPLAND COTTON  February 26, 2015

 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 March 5, 2015 allowing importation of 14,636,612 kilograms  (67,225 bales) of upland cotton.

Quota number 3 will be established as of March 5 and will apply to upland  cotton purchased not later than June 2, 2015, and entered into the U.S. not later  than August 31, 2015. The quota is equivalent to one week’s consumption of  cotton by domestic mills at the seasonally-adjusted average rate for the period July  2014 through September 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 moderate. Supplies and  producer offerings were light to moderate. Demand  was very good. Average local spot prices were  steady. Trading of CCC-loan equities was inactive.

 Overcast, damp conditions prevailed across the  entire region early week and scattered thunderstorms  brought trace amounts of around one inch of  accumulated precipitation to most areas. Winter  storm Remus swept across north Alabama, north  Georgia, the Carolinas, and Virginia late in the period  creating treacherous conditions and dumping more  than a foot of snow in areas of north Alabama. More  modest accumulations were reported in other  locations and power outages were widespread.

Sunny, clear conditions were forecast for most areas  in the near term and flood warnings were issued  where rivers were swollen and low-lying areas  remained saturated. Ginning activity neared  completion. Producers considered spring planting  options and attended meetings and the annual gin  show.

 South Central Markets   

North Delta  

Spot cotton trading was inactive. Supplies of  available cotton were light. Demand was good.

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

 Two storm systems brought a wintry mix of sleet  and freezing rain to the region during the week. Over  two inches of moisture were reported. The resulting  icy road conditions forced the closure of schools,  businesses, and government services in many areas.

Daytime high temperatures were in the upper 20s to  50s. Overnight lows were in the 20s, while the wind  chill factor dropped temperatures in the low teens.

According to the U.S. Drought Monitor, the moisture  helped alleviate the severe drought conditions in  northeastern Arkansas, the Bootheel of Missouri, and  western Tennessee, but more rainfall was needed to  recharge depleted soil moisture levels, lakes, and  ponds. Producers attended various local agricultural  workshops and regional cotton meetings.

 South Delta  

Spot cotton trading was inactive. Supplies of  available cotton were light. Demand was good.

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

  A severe winter storm moved through the region  during the week. Daytime high temperatures were  mostly in the 30s. Overnight lows were in the low  30s and mid-20s. Up to two inches of precipitation  were reported in Louisiana. Northern Mississippi  received about one inch of freezing rain, sleet, and  snow, which caused the closure of schools and  businesses. High temperatures were in the 30s.

Overnight lows were in the upper teens. According  to the U.S. Drought Monitor, soil moisture levels  were adequate throughout the region. Producers  attended various local agricultural workshops and  regional cotton meetings.

 Southwestern Markets   

East Texas-Oklahoma  

Spot cotton trading was moderate. Supplies were  moderate. Producer offerings were light. Demand  was good. Average local spot prices were steady.

Trading of CCC-loan equities was slow. Foreign mill  inquiries were light. Interest was best from  Indonesia, Pakistan, and Taiwan.

 Light showers in southern Texas impeded  fieldwork. Although planting season was underway,  conditions were too cold to sow cottonseed.

According to local reports, the soil contained a  desirable amount of moisture, but watershed was light  and lacked an overabundance of water. Heavy bands  of snow and ice brought one to four inches of  precipitation that stalled outside activities in eastern  Texas. Producers considered new seed varieties and  attended meetings. In Oklahoma, approximately four  gins remained opened and waited for a few module  deliveries to finish the season. The warehouse  continued to receive bales from the gins and shipping  was active. Kansas received four to eight inches of  accumulated snow, mostly in the western areas which  will help put moisture in the soil.

West Texas

Spot cotton trading was active. Supplies were heavy. Producer offerings were light. Demand was good.

Average local spot prices were steady. Trading of CCC-loan equities was inactive. Foreign mill inquiries were  light. Interest was best from Indonesia, Pakistan, and Taiwan.

 Harsh winter storms brought wet, icy conditions that halted field activities during the week. All gins in the  Lamesa Classing Office territory finalized operations for the season. The Abilene and Lubbock Classing Offices  were closed a few days for inclement weather. Both offices graded samples during the week. Producers  considered new seed varieties and attended meetings.

 Western Markets

Desert Southwest (DSW)  

Spot cotton trading was active. Producers offerings were moderate. Demand was light. Average local spot  prices were firm. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were  light.

 Temperatures were in the high 70s to mid-80s in Arizona. No moisture was recorded. Planting continued in  Yuma. Fieldwork was active. Ginning neared completion in central Arizona. Some cottonseed companies were  offering attractive deals in Arizona with seed contracts to ensure that the “save seed” programs or planting seed  nurseries remain viable. Temperatures were in the high 50s to low 30s in New Mexico and El Paso, Texas. A  wintry mix of sleet and rain was received in parts of New Mexico late in the period. Producers considered  planting options for 2015 as no firm prices for 2015-crop cotton were available at this time. The West coast ports  of Los Angeles and Long Beach were operational on Saturday, February 21 after union workers and Pacific  Maritime Association management reached an agreement on February 20. However, it will take weeks and  perhaps months to clear the backlog of containers on the ports.

 San Joaquin Valley (SJV)

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

Over three-quarters of an inch of welcome precipitation was received in the Valley over the weekend.

Temperatures dropped into to the low 50s. Sunny skies with temperatures in the mid-60s returned late in the  period. The latest weather event did not significantly change the Sierra Nevada Mountains snowpack levels. The  snowpack is 80 percent below average at this time. Lower ICE futures prices along with continuing drought  conditions have producers contemplating 2015-crop planting options. The West coast ports of Los Angeles and  Long Beach were operational on Saturday, February 21 after union workers and Pacific Maritime Association  management reached an agreement on February 20. However, it will take weeks and perhaps months to clear the  backlog of containers on the ports.

 American Pima (AP)  

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

 Temperatures were in the 70s for Arizona and in the low 50s to mid-60s in California. Temperatures were in  the low 30s to 40s mid-week in New Mexico and El Paso, Texas. Planting continued in Yuma, Arizona. Some  cottonseed companies were offering attractive deals in Arizona with seed contracts to ensure that the “save seed”  programs or planting seed nurseries remain viable. Producers considered planting options for 2015 as no firm  prices for 2015-crop cotton were available at this time. The West coast ports of Los Angeles and Long Beach  were operational on Saturday, February 21 after union workers and Pacific Maritime Association management  reached an agreement on February 20. However, it will take weeks and perhaps months to clear the backlog of  containers on the ports.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 41, leaf 5, and staple 36 for May/June delivery. Mill  buyers booked a light volume of 2015-crop cotton, color 42 and better, leaf 5 and better, and staple 32 and longer  for October/November delivery. No additional sales were reported. Reports indicated most mills had covered  their immediate-to-nearby raw cotton needs. Yarn demand remained good. Most mills continued normal  operating schedules, but production at many locations was interrupted late week by winter storm Remus, which  caused widespread power outages throughout the southeastern region due to freezing rain, ice, and snow.

  Demand through export channels was light to moderate; domestic cotton exporters cited the Chinese New  Year for the tapering demand. Agents for mills in Indonesia purchased a moderate volume of color 31, leaf 3,  and staple 35 for April shipment. Vietnamese mill buyers inquired for a moderate volume of USDA Green Card  Class, color 31, leaf 3, and staple 37 for prompt shipment. Agents for mills in Jakarta inquired for a moderate  volume of color 31, leaf 3, and staple 35 for March/May shipment. No additional sales were reported.

 Regional Price Information

Southeastern Markets

A light volume of even-running lots containing color 31, leaf 3, staple 38, mike 43-47, strength 32-34,  and uniformity 81-83 sold for around 71.75 cents per pound, FOB car/truck (Rule 5, compression  charges paid).

A light volume of color mostly 21 and 31, leaf 2-4, staple 35-38, mike 37-49, strength 28-32, and  uniformity 80-83 sold for around 69.25 cents, FOB car/truck, Georgia terms (Rule 5, compression  charges paid, 30 days free storage).

A moderate volume of color mostly 41, leaf mostly 4 and 5, staple 35-37, mike 43-52, strength 28-30,  and uniformity 80-82 sold for around 25 points off ICE May futures, same terms as above.

Mixed lots containing color mostly 42, leaf 3 and 4, staple 33-35, mike 50-52, strength 26-29, and  uniformity 79-81 sold for around 350 points off ICE May futures, same terms as above.

 South Central Markets

North Delta

No trading activity was reported.

 South Delta

A light volume of CCC-loan equities traded for 10.00 cents per pound.

 Southwestern Markets  

East Texas

In Texas, mixed lots containing a heavy volume of color 42 and better, leaf 5 and better, staple 36 and  longer, mike 40-53, strength 27-34, uniformity 79-84, and 100 percent extraneous matter sold for  around 53.00 cents per pound, FOB warehouse (compression charges not paid).

In Oklahoma, a heavy volume of color 21 and 31, leaf 4 and better, staple 33 and longer, mike 40-49,  strength 25-30, uniformity 77-82, and 75 percent extraneous matter sold for around 53.50 cents, FOB  car/truck (compression charges not paid).

East Texas

A light volume of color 31 and better, leaf 2 and 3, staple 31, mike 37-49, strength 27-31, and  uniformity 76-80 traded for around 51.25 cents, same terms as above.

In Kansas, mixed lots containing a heavy volume of color 42 and better, leaf mostly 4, staple 34 and  longer, mike averaging 34.6, strength averaging 28.5, uniformity averaging 80.4, and 75 percent  extraneous matter sold for around 46.00 cents, same terms as above.

A light volume of color 41 and 51, mostly leaf 5 and 6, staple 34 and 35, mike 27-31, strength 27-28,  uniformity 76-79, and 100 percent extraneous matter sold for around 42.00 cents, same terms as  above.

A light volume of CCC-loan equities traded for 5.00 cents.

 West Texas

A moderate volume of color 21, leaf 2 and 3, staple 36 and longer, mike 37-44, strength 28-32, and  uniformity 78-82 sold for around 67.00 cents per pound, FOB car/truck (compression charges not  paid).

Mixed lots containing a heavy volume of color 42 and better, leaf 4 and better, staple 36 and longer,  mike 40-53, strength 27-34, and uniformity 79-85 sold for around 53.00 cents, same terms as above.

A light volume of mostly color 11 and 21, leaf 3 and better, staple 33 and longer, mike 47-52, strength  27-31, and uniformity 79-81 sold for around 50.25 cents, same terms as above.

 Western Markets  

Desert Southwest

A heavy volume of rood cotton mostly color 52 and better, leaf 4-7, staple 34 and longer with 100  percent bark and grass traded for around 38.00 cents per pound, uncompressed, FOB warehouse.

 San Joaquin Valley

No trading activity was reported.

 American Pima

No trading activity was reported.

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