USDA – Weekly Cotton Market Review: Nov. 20, 2015

0
250

Spot cotton quotations averaged 66 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 61.12 cents per pound for the week ended Thursday, November 19, 2015. The weekly average was up from 60.46 cents last week and 57.72 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 60.38 cents Friday, November 13 to a high of 61.69 cents Thursday, November 19. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 19 totaled 86,031 bales. This compares to 32,389 bales reported last week and 69,715 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 244,890 bales compared to 327,862 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 63.12 cents, compared to 62.16 cents last week.

Prices are in effect from November 20-26, 2015

USDA ANNOUNCES SPECIAL IMPORT QUOTA #15
FOR UPLAND COTTON
November 19, 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 November 26, 2015, allowing importation of 15,287,174 kilograms (70,213 bales) of upland cotton.

Quota number 15 will be established as of November 26, 2015, and will apply to upland cotton purchased not later than February 23, 2016, and entered into the U.S. not later than May 23, 2016. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2015 through June 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 active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher. Trading of CCC-loan equities was inactive.

Harvest activities advanced at a slow pace across the lower southeast as the weather permitted. Widespread intermittent shower activity delayed fieldwork and overcast conditions prevented many fields from drying enough to support machinery. Producers welcomed clear and warm conditions late in the period with daytime highs in the low-to-mid-70s. Sunny, breezy conditions helped soft fields to firm and also bleach out damp cotton in the bolls. Cotton seeds sprouting in the boll continued to be reported in areas of south Georgia and Florida. Harvesting has also been delayed in these areas due to the excessive wet weather. In the upper southeast, sunny and fair conditions allowed harvesting activities to advance in dryer fields early in the period. In South Carolina, producers attempted to carefully navigate fields to salvage cotton, but conditions remained saturated in many areas with reports of machinery getting stuck. Producers expect lower cotton grades and yields as they continue to assess the damage from recent flooding. In North Carolina, hard lock and boll rot was reported as many areas experienced extended periods of overcast conditions and drizzle. Monetary losses in the Carolinas, due to deteriorating lint quality and yield loss, is expected to be significant. In Virginia, mostly clear conditions allowed producers to get more cotton off of the stalk ahead of additional rainfall forecast in the near term.

South Central Markets

North Delta

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

Rain showers during the middle of the period brought more unwelcomed moisture to fields already saturated from previous rainfall. Accumulations of up to 6 inches of precipitation were reported. Daytime temperatures behind the storm front dropped

daytime highs into the upper 50s and overnight temperatures were in the mid-30’s in northern portions of the region. Producers in Arkansas were able to complete harvesting between rain events, but the additional moisture hampered efforts in Missouri and Tennessee to finalize outdoor activities. Some gins operated on reduced schedules due to a shortage of accessible modules. Soft soils firmed enough to support equipment in fields with lighter soils by the end of the period. According to the National Agricultural Statistics Service, harvesting had reached 99 percent in Arkansas, 88 in Missouri, and 78 percent in Tennessee, which was near the five- year average in all states. Soil moisture conditions continued to improve with the added precipitation. A few pockets of abnormally dry areas persisted in southeast Arkansas, but elsewhere soil moisture was mostly rated as adequate to surplus.

South Delta

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

Wet weather and cool temperatures continued to dominate climatic conditions during the reporting period. Up to 4 inches of precipitation were reported. High temperatures were in the upper 60s and overnight lows were in the low 40s. Field operations were at a standstill due to saturated soil conditions in Mississippi. Producers were hoping for a period of clear, breezy conditions to dry fields and fluff cotton remaining on the stalk. Ginning was delayed at some gins due to insufficient backlogs of modules on their yards. The National Agricultural Statistics Service reported that harvesting had reached 94 percent in Mississippi, about one week behind the five-year average. According to the U.S. Drought Monitor, soil moisture conditions were rated as surplus for the entire state of Louisiana, but an area of moderate drought persisted in central Mississippi.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was active. Supplies and producer offerings were lig. Demand was light.

Average local spot prices were firm. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate. Interest was best from Taiwan, Turkey, and Vietnam.

Widespread rainfall in the Blackland Prairies continued to delay harvesting and ginning. Some damage was so severe that fields were abandoned. Severe weather moved through south Texas and the Rio Grande Valley. Rainfall will be beneficial for the next season. In Kansas, harvesting and ginning continued. According to the National Agricultural Statistics Service (NASS) Crop Progress report released on November 16, harvesting was 51 percent completed, ahead of the 33 percent last year. Some counties had severe weather delays as thunderstorms moved across the state. Oklahoma fields were 60 percent harvested according to NASS.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was moderate. Average local spot prices were steady. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate. Interest was best from Taiwan, Turkey, and Vietnam.

Rain, hail, and high winds delayed harvesting early in the period. Gins continued processing the backlog of modules on the gin yards. Most gins were working two shifts. In the Southern Rolling Plains, reports indicated that most fields had been harvested, but some fields presented green leaves and were not prepared to be harvested. Harvesting progress varied throughout the counties with some being finished and others around 40 percent completed. Regrowth continued to be problematic. Meetings were attended.

Western Markets

Desert Southwest (DSW)

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

Temperatures began the period in the low 80s in Arizona and dropped into the high 60s. Scattered showers produced one-quarter of an inch of precipitation. Ginning continued. Clear, cold, and mostly dry conditions prevailed for New Mexico and El Paso, Texas. Daytime high temperatures were in the 60s, with nighttime lows in the low 30s. Harvesting and ginning continued uninterrupted.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Competitive foreign growths such as Australian, Brazilian, and Indian cotton were more attractive to foreign mill buyers.

Showers moved into California early in the period. Precipitation amounts of one-quarter of an inch were recorded in the Valley. The storm deposited several inches of fresh snow on the Sierra Nevada Mountain range. The rest of the period was dry and cooler, with temperatures in the mid-50s to low 60s. Ginning continued. Several gins were closed for the season, with more closing just prior to Thanksgiving.

American Pima (AP)

Spot cotton trading was slow. Supplies were moderate. Demand was light and was best for prompt shipment. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures were mostly in the 60s to 50s in the far west. Rainfall amounts of around one-quarter of an inch were recorded in Arizona and the San Joaquin Valley (SJV) early in the reporting period. Snow was received in higher elevations of Arizona and California. No moisture was received in New Mexico and El Paso, Texas. Harvesting and ginning continued uninterrupted. Local sources reported that some SJV AP yields were below average. Insect pressures, early fall rains, and cold conditions were contributing factors. A couple of SJV gins were closed for the season, with more closing just prior to Thanksgiving.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 31, leaf 3, and staple 34 for January through December 2016 delivery. No sales were reported. Some domestic cotton shippers adopted a cautious undertone and were unwilling to offer a heavy volume of higher grade styles of cotton, as unrelenting rainfall in the southeast continued to negatively impact raw fiber quality in unharvested fields. Yarn demand had begun to taper at some locations. Reports indicated some mills were delaying delivery of raw cotton and scheduling intermittent downtime at some plants to control inventories. Most mills operated five to seven days with planned downtime for the Thanksgiving holiday.

Inquiries through export channels were moderate. Agents throughout the Far East inquired daily for any discounted styles of cotton.

Regional Price Information

Southeastern Markets

  • Even-running lots containing color 31 and 41, leaf 2 and 3, staple 36, mike 49-50, strength 28-30, and uniformity 80-82 sold for around 65.75 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color 31 and 41, leaf 2-4, staple 35-37, mike 50 and higher, strength 28-31, and uniformity 80-83 sold for around 63.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A heavy volume of mixed lots containing color mostly 52 and 62, leaf 4-6, staple 33-37, mike 43-52, strength 26-29, and uniformity 80-82 sold for around 55.75 cents, same terms as above.

South Central Markets

North Delta

  • No trading activity was reported.

South Delta

  • A light volume of color 31 and better, leaf 4 and better, staple 32-34, mike 42-49, strength 29-36, and uniformity 79-84 traded for around 60.00 cents per pound, FOB car/truck (Rule 5 compression charges paid).

Southwestern Markets

East Texas

  • In Texas, a moderate volume of mostly color 11 and 21, leaf 2 and 3, staple 37, mike 44-47, strength 32-34, and uniformity 81-82 sold for around 61.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a moderate volume of color 21, leaf 2 and 3, staple 37 and 38, mike 41-44, strength 31-33, and uniformity 82-83 sold for around 64.50 cents, same terms as above.
  • A light volume of color 21, leaf 2 and 3, staple 33-34, mike 43-46, strength 32-34, and uniformity 82-83 sold for around 63.50 cents, same terms as above.
  • A light volume of color 21, leaf 3, staple 37, mike 41-43, strength 32-33, and uniformity 82-83 sold for around 63.00 cents, same terms as above.
  • Mixed lots containing color 22 and better, leaf 2 and better, staple 36 and 37, mike averaging 34.0, strength averaging 32.7, and uniformity averaging 81.7 sold for around 58.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for around 8.00 cents.

West Texas

  • A heavy volume of color 11 and 21, leaf 3 and better, staple 37, mike averaging 36.0, strength averaging 32.2, and uniformity averaging 81.6 sold for around 63.50 to 65.00 cents per pound, FOB car/truck (compression charges not paid).
  • Even-running lots containing mostly color 21 and better, leaf 2 and better, staple 36, mike 36-50, strength 29-34, and uniformity 78-82 sold for around 64.25 cents, same terms as above.
  • A light volume of color mostly 21 and better, leaf 2 and better, staple 33 and 34, mike averaging 45.0, strength averaging 29.0, and uniformity averaging 79.0 sold for around 55.50 cents, same terms as above.
  • A moderate volume of color 31 and better, leaf 4 and better, staple 37 and longer, mike 35-49, strength 27-32, and uniformity 79-81 sold for around 59.50 to 61.00 cents, same terms as above.
  • A moderate volume of color 31 and better, leaf 4 and better, staple 37, mike averaging 30.0, strength averaging 32.5, uniformity averaging 80.0, with 25 percent bark sold for around 54.25 to 55.50 cents, same terms as above.
  • A light volume of color 32 and better, leaf 4 and better, staple 35 and longer, mike 37-49, strength 27-32, and uniformity 79-83 sold for around 57.50 cents, same terms as above.

Western Markets

Desert Southwest

  • A light volume of cotton mostly color 11, leaf 2 and better, staple 37 and longer, mike averaging 45.0, strength averaging 32.2, and uniformity averaging 83.8 traded for around 200 points on ICE March futures, uncompressed, FOB warehouse.
  • A moderate volume of mostly color 21 and better, leaf 2 and better, staple 35 and longer, mike averaging 47.0, strength averaging 29.8, and uniformity averaging 81.0 traded for around 50 points on ICE March futures, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A moderate volume of color 2, leaf 2, and staple 46 traded for around 140.00 cents per pound, UD free, FOB warehouse.

Source: USDA

LEAVE A REPLY