USDA – Weekly Cotton Market Review: May 1, 2015

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Spot cotton quotations were 307 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 64.78 cents per pound for the week ended Thursday, April 30, 2015. The weekly average was up from 61.71 cents last week, but lower  than the 86.50 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of  64.38 cents on Monday, April 27 to a high of 65.63 cents on Thursday, April 30.  Spot transactions reported in the  Daily Spot Cotton Quotations for the week ended April 30, totaled 54,441 bales. This compares to 8,395 bales reported  last week and 9,264 bales reported a year ago. Total spot transactions for the season were 2,041,196 bales, compared  to 1,270,343 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 67.88 cents,  compared to 65.45 cents last week.

Prices are in effect from May 1-7, 2015 
    
Adjustment World Price (AWP)  51.70     ELS Competitiveness Payment  0.00 
Loan Deficiency Payment (LDP)    0.30   Fine Count Adjustment  2014 Crop  0.31 
Coarse Count Adjustment (CCA)    0.00   Fine Count Adjustment 2015 Crop  0.26 
Source:  Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #12  FOR UPLAND COTTON  April 30, 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 May 7, 2015, allowing importation of 14,667,427 kilograms (67,367 bales) of upland cotton. Quota number 12 will be  established as of May 7, 2015, and will apply to upland cotton purchased not later than August 4, 2015, and entered into  the U.S. not later than November 2, 2015.  The quota is equivalent to one week’s consumption of cotton by domestic mills  at the seasonally-adjusted average rate for the period November 2014 through January 2015, 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.  Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was slow.

  Widespread thunderstorms brought light to moderate rainfall to areas throughout the southeastern region during much of the period.   Portions of south Alabama and the Florida panhandle received around one to two inches of weekly accumulated moisture, with lesser  day-to-day totals of around one inch recorded farther north in the Carolinas and Virginia.  Soil moisture conditions and stream  flows were very good.  The damp weather halted most fieldwork, but producers applied burndown treatments and fertilizer in areas  where conditions allowed.  Planting activity has been slow to start, but should rapidly get underway as excellent weather with  sunny conditions and rising temperatures were forecast in the near term.

Regional Summaries

South Central Markets    

North Delta  

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

Cool temperatures and overcast skies persisted during most of the week.   Isolated showers brought up to two inches of unnecessary  moisture to some areas.  Daytime high temperatures were in the 60s early week, before giving way to a warming trend late week.  Overnight lows were in the 40s and 50s.  Planting was underway in southern Arkansas, on a limited basis, in fields that could support equipment.  Herbicide treatments and fertilizer applications were also in progress.  A period of warm, dry weather is in the forecast, so fieldwork  is expected to increase rapidly throughout the region during the week ahead.

South Delta  

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

Continued rain showers dominated the weather pattern during the week.  Widespread rain showers brought up to four inches of surplus  moisture to most areas.  Daytime high temperatures were in the 60s and 70s.  Overnight lows were in the low 50s.  The National Agricultural  Statistics Service reported that topsoil and subsoil moisture levels were mostly adequate to surplus. Some planting occurred in Mississippi,  but  no cotton was reported to have been planted in Louisiana, due to  the wet soil  conditions.  A period of warm, dry weather is forecast  for the week  ahead, so  planting  is expected to expand soon.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was active.  Supplies were moderate.  Producer offerings were light.  Demand was moderate.  Average local spot prices  were higher.  Trading of CCC-loan equities was moderate.  Foreign mill inquiries were light.

According to the Pest Cast newsletter released on April 24, approximately 50,000 acres were planted in the Lower Rio Grande Valley.   Some fields were at 6 true leaves and early planted stands had begun to square.  South Texas received showers and thunderstorms that  left most fields too soft to support equipment, so fieldwork was limited.  Heavy thunderstorms in eastern Texas dumped 3 to 10 inches  of rainfall early in the week.  Straight-line winds were reported at 80 miles per hour that caused property and crop damage.  Most  creeks overflowed the banks and washed across roadways and fields.  Some cotton fields had emerged and some were at the 4 true leaves  stage, but many stands were underwater.  Some producers took advantage of drier conditions late in the week and tried to plant in the  mud, since the forecast shows storm activities in the coming days.  Field activity in western Kansas was limited because soil temperatures  were not optimal. Dry, cold conditions prevailed.  In Oklahoma, producers were encouraged with recent slow, soaking rainfall that helped  to alleviate the drought. Industry experts reported that some producers decided to kill their wheat fields and prepare them for cotton planting.

West Texas  

Spot cotton trading was active. Supplies were moderate. Producer offerings were light. Demand was moderate. Average local spot prices were  higher. Trading of  CCC-loan equities was slow. Foreign mill inquiries were light.

Cold, rainy conditions early in the week brought one-half to one inch of general rainfall.  Variable daytime temperatures were in the 50s to the 80s.   Some areas reported nighttime lows below freezing for two nights during the cold front.  The cold snap discouraged producers from early cotton planting.   Most were busy planting corn and sorghum according to local expert reports.  A slight decrease in acreage is expected, since some fields are being  planted with alternative crops. Regional meetings were attended.

Western Markets    

Desert Southwest (DSW)  

Spot cotton trading was inactive.  Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill  activity was reported.  Foreign mill inquiries were light.

Light showers over the weekend dropped temperatures into the mid-70s in Arizona.  Temperatures reached the high 90s by the end of the period.  The crop  made excellent progress in Yuma.  Some producers applied the first round of fertilizers and irrigations to the crop.  Pinhead squares were sighted in the  earliest-planted fields.  No insect pressures were reported.  Cotton seedlings were up to a stand in central Arizona, but nighttime temperatures in the  low 40s slowed progress.  Local experts reported planting at 75 percent completed. Some producers considered double-cropping cotton after the wheat  harvest, but any cotton planted after May 15 is not eligible for the STAX program. Temperatures were mostly in the mid-70s for New Mexico and El Paso, Texas.   Planting progressed in New Mexico and El Paso, Texas.  Freeze damage was reported in some early-planted fields of New Mexico.  Replanting is necessary.   Sources estimated that approximately 30 percent of the crop was planted.  Lack of irrigation water remains a concern.  Producers will rely on well water  as irrigation districts plan for first water releases on June 1.

San Joaquin Valley (SJV)  

Spot cotton trading was inactive.  Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill  activity was reported. Foreign mill inquiries were light.

A cold front dropped temperatures into the mid-70s to low 80s early in the reporting period.  Up to three-quarters of an inch of beneficial rain was received  in the Valley on April 25.  A couple of inches of snowfall were received in the Sierra Nevada Mountain range.  Temperatures returned to the low 90s by the end  of the period.    The increased heat units allowed the crop to advance and make good progress.

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 increased for  2015-crop cotton and mostly for price discovery.  Interest was best from China, Indonesia, and Pakistan.

A cold front dropped temperatures into the low to mid-70s for Arizona and California early in the reporting period.  Temperatures were in the high 60s to low 70s  for New Mexico and El Paso, Texas.  Temperatures reached the mid-80s to low 90s for the region late in the period.  Beneficial rainfall of around one-tenth of an  inch was received in central Arizona, and three-quarters of an inch was received in the San Joaquin Valley (SJV).  The crop made good progress in Arizona and the SJV.   The first round of fertilizers and irrigations were underway in Yuma, Arizona. Some fields exhibited pinhead squares.  No insect pressures were reported.  Heat units  were ahead of normal in Arizona and the SJV.  Planting progressed in New Mexico and El Paso, Texas.  Freeze damage was reported in some early-planted fields of New Mexico.   Replanting is necessary.  Lack of irrigation water remains a concern.  Producers will rely on well water as irrigation districts plan for first water releases on June 1.

Textile Mill  

Domestic mill buyers inquired for a moderate volume of 2015-crop cotton, color 53 and better, leaf 5 and better, and staple 32 and longer for delivery January through  March 2016.  Demand was also good for color 51 and better, leaf 5 and better, and staple 33 and longer for second and third quarter fill-in needs.  No sales were reported.   Domestic shippers reported that some mills fixed prices on a moderate volume of previously booked cotton.  Yarn demand remained moderate-to-good and most mills operated  five to seven days.

Inquiries through export channels were moderate.  Taiwanese mill buyers inquired for a moderate volume of USDA Green Card Class 2015-crop cotton, color 31, leaf 3,  and staple 36 for November/December shipment.  Taiwanese agents also inquired for a moderate volume of color 42, leaf 4, and staple 33 for nearby shipment.  No sales  were reported.  Representatives for mills in Korea and Vietnam inquired for a moderate volume of color 31 and 41, leaf 3, and staple 37 for December through June 2016  shipment.  No sales were reported.

ICAC Releases Report on Measurement of Sustainability in Cotton

The ICAC Expert Panel on Social, Environmental and Economic Performance of Cotton Production (SEEP), constituted by 14 experts from all over the world, has released its final report on “Measuring Sustainability in Cotton Farming Systems: Towards a Guidance Framework”. The document provides an overview of sustainability themes and recommends a set of indicators to assess and measure progress on the critical sustainability issues for cotton farming. The report was developed on the understanding that any coordinated, industry-wide effort on measuring the sustainability of cotton farming must start with discussion and agreement on what are the key issues that need to be addressed, what are the best indicators to assess progress towards becoming more sustainable, and who are the appropriate stakeholders to undertake the responsibility for doing so. The list of recommended indicators was developed by 1) reviewing a comprehensive range of programs to extract their indicators and creating an inventory of potential indicators; 2) selecting the most relevant ones from this inventory through an objective rating system and 3) expert review of the selected indicators. The list of indicators is a suggested starting point for discussion, and there is no intention that it should be mandatory.

upport for the final report has been provided by the German Federal Enterprise for International Cooperation (GIZ), the Food and Agriculture Organization of the United Nations (FAO), SEEP members, and the Secretariat of the ICAC. The contributions from each organization are very much appreciated.

Regional Price Information

Southeastern Markets

A moderate volume of color 31 and 41, leaf 3 and 4, staple 37 and 38, mike 43-49, strength 29-32, and uniformity    80-83 sold for around 68.50 cents per pound,  FOB car/truck (Rule 5, compression charges paid).

A heavy volume of color 31 and 41, leaf 2-4, staple 34-36, mike 43-52, strength 27-30, and uniformity   80-83 sold for around 67.00 cents, FOB car/truck,  Georgia terms (Rule 5, compression charges paid, 30 days free storage).

A light volume of mixed lots containing color 62 and better, leaf 4-6, staple 34-36, mike 43-49, strength 24-27, and uniformity 79-81 sold for around 56.50 cents,  same terms as above.

A heavy volume of CCC-loan equities traded for 14.50 to 17.00 cents.

South Central Markets    

North Delta

No trading activity was reported.

South Delta  

No trading activity was reported

Southwestern Markets    

East Texas  

In Texas, a light volume of mostly color 31 and better, leaf 2 and 3, staple 35 and 36, mike 50-52, strength 30-33, and uniformity 82-83 sold for around 60.50  cents per pound, FOB warehouse (compression charges not paid).

In Oklahoma, a light volume of color 21, leaf 3, staple 34 and longer, mike 40-50, strength 27-33, and uniformity 77-82 traded for around 62.00 cents,  FOB car/truck (compression charges not paid).

Mixed lots containing a heavy volume of color 31 and better, leaf 4 and better, staple 36 and longer, mike 32-47, strength 28-32, uniformity 77-82, and 75  percent extraneous matter sold for around 56.50 cents, same terms as above.

A heavy volume of CCC-loan equities traded for around 9.00 cents.

West Texas  

Mixed lots containing a heavy volume of color 31 and better, leaf 4 and better, staple 36 and longer, mike averaging 41.8, strength averaging 27.8,  uniformity averaging 80.2, and 50 percent extraneous matter sold for around 56.50 cents per pound, FOB car/truck (compression charges not paid).

A light volume of color 32 and better, leaf 3 and better, staple 32 and longer, mike 42-49, strength 25-29, uniformity 77-81, and 75 percent extraneous  matter sold for around 55.00 cents, same terms as above.

Mixed lots containing a light volume of color 41 and better, leaf 5 and better, staple 34 and longer, mike 35-49, strength 25-31, uniformity 76-83, and  50 percent extraneous matter sold for around 51.25 cents, same terms as above.

A light volume of CCC-loan equities traded for around 8.00 to 13.00 cents.

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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