USSDA – Weekly Cotton Market Review: May 29, 2015

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Weekly average spot cotton quotations were 129 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 61.59 cents per pound for the week ended Thursday, May 28, 2015. The weekly  average was down from 62.88 cents last week and lower than the 79.21 cents reported the corresponding period a year ago. Daily average  quotations ranged from a low of 61.14 cents on Wednesday, May 27, to a high of 62.41 cents on Thursday, May 28.  Spot transactions reported  in the Daily Spot Cotton Quotations for the week ended May 28, totaled 3,882 bales. This compares to 5,605 bales reported last week and 2,723  bales reported a year ago. Total spot transactions for the season were 2,064,406 bales, compared to 1,294,616 bales the corresponding week a  year ago. The ICE July settlement prices ended the week at 64.33 cents, compared to 63.73 cents last week.

Prices are in effect from May 29 – June 4, 2015 
    
Adjustment World Price (AWP)     50.04      ELS Competitiveness Payment  0.00 
Loan Deficiency Payment (LDP)    1.96       Fine Count Adjustment  2014 Crop  0.28 
Coarse Count Adjustment (CCA)    0.00       Fine Count Adjustment 2015 Crop  0.23 
Source:  Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #16  FOR UPLAND COTTON  May 28, 2015

The Department of Agriculture’s Commodity Credit Corporation today 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 4, 2015, allowing importation of  14,667,427 kilograms (67,367 bales) of upland cotton. Quota number 16 will be established as of June 4, 2015, and will apply to upland cotton  purchased not later than September 1, 2015, and entered into the U.S. not later than November 30, 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 slow.  Supplies and producer offerings were light.  Demand was moderate.  Average local spot prices were lower. Trading  of CCC-loan equities was inactive.

 Partly cloudy weather prevailed during the period and spotty shower activity brought scattered rainfall to much of Alabama, and portions of south  Georgia and the Florida panhandle.  In some areas, heavy localized downpours totaled around three-quarters of an inch.  Producers continued to  dust-in seed in areas that have missed precipitation, irrigation schedules were underway.  Lesser day-to-day precipitation accumulations were  observed in the Carolinas and Virginia, fieldwork was generally uninterrupted.  Planting activity advanced in all areas; according to the  National Agricultural Statistics Service Crop Progress Report released May 26, planting reached 84 percent completed in Virginia, 75 in  South Carolina, 68 in North Carolina, 65 in Georgia, and 63 percent completed in Alabama.  Producers applied pre-emergence herbicides to combat  glyphosate resistant Palmer amaranth (pigweed) in areas of Georgia.  Pressure from thrips was spotty; some of the earliest planted fields  required spray treatments.  A few isolated fields were replanted due to damage from grasshoppers.

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.

 Partly cloudy skies and moderately cool temperatures predominated the weather pattern for the week, along with a few scattered thunderstorms.  Daytime temperatures were in the low 80s and overnight lows were in the 60s.  Several producers continue to mitigate planting and herbicide  treatment in order to allow saturated fields to dry after receiving heavy rainfall from the previous week. As a result, some areas reported  minor crop damage. Producers are weighing the options of whether to continue planting or re-plant with soybeans. There have been reports of  thrips in the fields; however, their presence has likely diminished due to the heavy rains. According to the National Agricultural Statistics  Service’s Crop Progress report released on May 26, planting advanced to 89 percent in Arkansas and 76 in Missouri and 70 percent in Tennessee.

South Delta  

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

 Isolated thunderstorms and cool conditions prevailed during the period. Temperatures ranged from the mid-80s in the daytime to the mid-60s  overnight. Producers in the region have nearly finished planting. Some cotton has begun to square. The remaining fields are likely to be  re-planted with soybeans according to some producers. The presence of thrips and cutworms have been reported, but are fairly low in number.  Producers now hope for more dry weather to firm wet fields, as the excessive moisture has postponed weed treatment for the most part.  According to the National Agricultural Statistics Service, planting advanced to 88 percent in Louisiana and 79 in Mississippi.

Southwestern Markets

East Texas-Oklahoma

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

Heat units accumulated and stands advanced in the Rio Grande Valley.  Occasional rain showers halted fieldwork.  Young plants showed strong  crop vigor and were squaring and fruiting.  Producers monitored for fleahopper and aphid populations.  Eastern Texas continued to receive  heavy rainfall that flooded fields and cities.  Some cotton fields were standing in water, as nearby rivers and creeks overflowed banks.   Severe weather continued throughout the week and brought as much as seven and one-half inches of rainfall to the region.  Weeds and thrips  were uncontrollable, and went untreated since fields were too soggy to support equipment for applications.  Aerial applications were underway  whenever weather permitted.  A period of dry weather was needed.  Kansas and western Oklahoma received more rainfall that interfered with  field activities.  Lake Altus-Lugert, which is the source for irrigated fields in southwestern Oklahoma, continued to rise and was around  75 percent of capacity according to industry reports.  No allotment information is available, but will be determined at a later date.   Reports indicated that no planting occurred in Oklahoma.  In Kansas, some fields firmed enough to sow seed on May 27, but planting activity  was limited.  Insurance planting deadlines are set for May 31.  Producers remained hopeful that a window of dry and sunny conditions would  materialize, allowing planting to continue.

West Texas  

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

Some fields were too wet to plant. Other fields dried enough to plant early in the reporting period, before intermittent mid-week storms  brought more rainfall to the region.  Planting was active on May 26 and 27.  A severe thunderstorm northwest of Lubbock on the evening of  May 27 brought three to eight inches of rainfall and hail, which furthered delayed planting efforts.  Producers were busy sowing seed  ahead of the final insurance planting deadlines on May 31 in the Northern High Plains.  Weed and pest management was underway.  Rains  were received in eastern New Mexico and helped improve drought conditions, but slowed planting activities.  Chaves, Curry, Lea, Quay, and  Roosevelt counties in New Mexico are approaching the insurance planting deadlines for irrigated fields on May 31, according to the maps  from the Risk Management Agency.

Western Markets

Desert Southwest (DSW)  

Spot cotton trading was inactive.  Supplies were light.  Demand was moderate.    Average local spot prices were higher.   No domestic mill activity was reported.

Southeastern Arizona saw some drought improvement with recent rainfall.  Almost an inch of moisture was received in central Arizona on May 22.   Temperature highs were in the mid-90s, and lows were in the mid-70s.  The crop reached peak bloom in Yuma, Arizona.  Insect pressure was  light and easily manageable.  Fields in New Mexico and in El Paso, Texas made good progress under sunny conditions.  Producers awaited the  release of irrigation water in New Mexico.

San Joaquin Valley (SJV)  

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

On May 22, the California Water Resources Board accepted a proposal that some farmers, with senior water rights to the Sacramento and  San Joaquin rivers, have volunteered to reduce their water usage by 25 percent.  This will be accomplished by fallowing additional farmland,  reducing herds, and/or cutting back on irrigation.  The governor of California declared a mandatory 25 percent reduction of water usage for  all residential consumers and businesses on April 1.  Some fields remained fallowed from the 2014 planting/growing season, when irrigation  water allotments were reduced by the state.

American Pima (AP)  

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

The crop reached peak blooming stage in Yuma, Arizona.  Little-to-no insect pressure was reported.   Fields in New Mexico and in  El Paso, Texas made good progress under sunny conditions.  Producers anticipated the release of irrigation water in New Mexico.

Textile Mill  

Domestic mill buyers inquired for a moderate volume of 2014 and 2015-crop cotton, color 41, leaf 4 and 5, and staple 34 and longer for  October 2015 through September 2016 delivery.  No sales were reported.  Most mills have covered their immediate-to-nearby raw cotton needs.   Demand for open-end and ring-spun yarn was moderate to good.  Most mills operated five to seven days.    Inquiries through export channels were moderate.  Demand was best throughout the Far East for any discounted or low-grade styles of cotton.

Regional Price Information

Southeastern Markets

A moderate volume of color 31 and 41, leaf 3 and 4, staple 36-38, mike 35-49, strength 28-31, and uniformity 80-83  sold for around 65.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A moderate volume of color 21-41, leaf 1-4, staple 32-34, mike 50 and higher, strength 25-28, and uniformity 79-81  sold for around 56.00 cents, same terms as above.

A light volume of color 32 and 42, leaf 2-4, staple mostly 32 and 33, mike 50 and higher, strength 26-29, and uniformity 78-80  sold for around 54.00 cents, same terms as above.

South Central Markets    

North Delta

No trading activity was reported.

South Delta

A moderate volume of color 31 and 41, leaf 2-4, staple 33 and 34, mike 50 and higher, strength 27-30, and uniformity 80-82  sold for around 55.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

A light volume of color 31 and 41, leaf 2-4, staple mostly 33, mike 35-49, strength 25-28, and uniformity 78-80  sold for around 57.50 cents, same terms as above.

Southwestern Markets    

East Texas

In Texas, mixed lots containing a light volume of mostly color 32 and 42, leaf 4, staple 36 and longer, mike 35-46, strength 29-33,  and uniformity 79-83 sold for around 60.50 cents per pound, FOB warehouse (compression charges not paid).

A moderate volume of mostly color 21 and 31, leaf 3 and better, mostly staple 32 and 33, mike 40-52, strength 24-30, and  uniformity 76-80 sold for around 53.50 cents, FOB car/truck (compression charges not paid).

In Kansas, Oklahoma and Texas, mixed lots containing a light volume of color 43 and better, leaf 8 and better, staple 35 and longer,  mike 25-47, strength 24-33, uniformity 75-83, and 75 percent extraneous matter sold for around 42.00 cents, same terms as above.

West Texas

Mixed lots containing a heavy volume of color 44 and better, leaf 6 and better, staple 36 and longer, mike 30-53, strength 26-32,  uniformity 78-81, and 100 percent extraneous matter sold for around 51.00 cents per pound, FOB car/truck (compression charges not paid).

A light volume of mostly color 33, leaf 3 and better, staple 34 and longer, mike 27-46, strength 27-31, uniformity 77-80,  and 25 percent extraneous matter sold for around 48.00 cents, same terms as above.

Mixed lots containing a light volume of color 43 and better, leaf 8 and better, staple 37 and longer, mike averaging 36.6, strength  averaging 29.5, uniformity averaging 79.9, and 75 percent extraneous matter sold for around 42.00 cents, same terms as above.

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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