USDA – Weekly Cotton Market Review: February 26, 2016

0
374

Spot cotton quotations were 141 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 56.87 cents per pound for the week ended Thursday, February 25, 2016. This was the lowest weekly average since September 17, 2009.The weekly average was down from 58.28 cents last week and the 63.05 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 58.14 cents Friday, February 19 to a low of 56.04 cents Wednesday, February 24. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 25 totaled 31,336 bales.

This compares to 64,205 bales reported last week and 51,586 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,222,587 bales compared to 1,796,723 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 57.76 cents, compared to 59.70 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #3 FOR UPLAND COTTON February 25, 2016

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 3, 2016, allowing importation of 14,390,725 kilograms (66,095 bales) of upland cotton. Quota number 3 will be established as of February 25, 2016, and will apply to upland cotton purchased not later than May 31, 2016, and entered into the U.S. not later than August 29, 2016. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 2015 through December 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 Market

Spot cotton trading was slow. Supplies were moderate. Producer offerings were moderate.

Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Overcast conditions were observed across the Southeast early in the period with daytime high temperatures in the upper 60s to lower 70s. A severe winter storm system swept across the region mid-week and brought damaging winds, hail, and created tornado outbreaks from the Gulf Coast to the Northeast. A state of emergency was declared in areas of south Alabama and the Florida panhandle as multiple twisters damaged homes and left thousands without power during the height of the storm. Tens of thousands were left without power in the Carolinas and Virginia. First responders and emergency crews worked to clear storm debris which left roads impassable in many areas. A state of emergency was declared in Virginia where at least four deaths were confirmed and dozens of injuries reported due to possible tornadoes. One death was reported in South Carolina. The heaviest rainfall totals reported throughout the region were around 1 to 2 inches of day-to-day moisture, but many locales received lesser accumulations.

Cool and sunny weather returned late in the period as a high pressure system settled over the region and brisk, windy conditions were observed. No fieldwork was reported. Producers considered spring planting options.

South Central Markets

North Delta

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

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

A severe storm system brought a wintry mix of locally heavy rain showers, snow flurries, and strong winds of up to 55 miles per hour. Tornadoes were seen in parts of Arkansas; no damage was reported. Temperatures were seasonably cold during the period. Daytime temperatures varied from the upper 30s to the mid-50s. Overnight temperatures were in the low 30s. Up to 2 inches of rain was reported throughout the region. Fields were saturated from the heavy rain in localized areas. No fieldwork was reported. Producers and merchants made plans to attend the Mid-South Farm and Gin Show and other industry events.

South Delta

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

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

A severe storm system brought multiple tornadoes and locally heavy rain showers to widespread parts of the region. Four EF2 category tornadoes with wind speeds of up to 135 miles per hour, one of which resulted in two fatalities in Louisiana, were confirmed by National Weather Service radar. One fatality was also reported in Mississippi. Dozens of homes and other buildings were damaged or destroyed. A state of emergency was declared for all affected areas in both states.

Temperatures were seasonably cold during the week. Daytime temperatures varied from the upper 30s to the mid-50s. Overnight temperatures were in the low 30s. Up to 2 inches of rain was reported throughout the region. Fields were saturated from the heavy rain in localized areas.

Fieldwork was at a standstill. Producers and merchants made plans to attend the Mid-South Farm and Gin Show and other industry events.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was active. Supplies were moderate. Producer offerings were light.

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

Producers in south Texas expanded planting activities because of the unseasonably warm temperatures.

Precipitation was in the nearby forecast. Strategically scheduled sowing took place early in the period to use any possible moisture for seed germination. Light-to-moderate rainfall entered the area on February 22-23 and eased dry soils. Planting expanded in the Rio Grande Valley (RGV) under windy and dry conditions. Storm activity skirted around the RGV and rainfall is needed to help establish stands. East Texas fields received one-half to one and one-half inches of widespread beneficial rainfall. Producer reports indicated that rainfall was needed to improve topsoil moisture levels ahead of field preparation and planting activities. In Kansas, ginning was winding down. Field preparations were limited. In Oklahoma, outside conditions were windy and cooler with rainfall early in the reporting period. Beneficial rainfall measured three-tenths to one inch across the southwestern counties. Ginning activities were winding down for the season with less than five gins in operation.

West Texas

Spot cotton trading was active. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Foreign mill inquiries were moderate. Interest was best from China, Taiwan, and Turkey.

Most ginning operations finalized the season; however, about 10 gins continued pressing bales.

Summer-like conditions prevailed early in the reporting period and fieldwork advanced with a focus on weed control. Producers tilled fields and applied herbicide products. Precipitation was welcomed on February 22 and 23, which improved topsoil moisture. Some areas received snow, hail, and freezing rain mid-period that interrupted all fieldwork. Daytime temperatures varied wildly from the low 40s to the upper 80s. Planting strategies were discussed and budgets were planned at regional and local meetings. Diesel fuel and fertilizer costs had moderated. Producers considered seed varieties and placed seed orders. Leasing contracts for farming acreage are being renegotiated due to lower commodity prices.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and demand were light. Average local prices were lower.

No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Unseasonably warm conditions continued in the DSW. Temperatures were in the high 80s to 90s.

The dry spell for February continues. Planting was underway in Yuma, Arizona. Reports indicated that about 40 percent was planted and 5 percent germinated; early indications suggest this will be an early crop. Field preparations continued in central Arizona. Ginning was completed. Plenty of sunshine and temperatures in the high 70s to low 80s were the norm in New Mexico and El Paso, Texas early in the period. Temperatures dropped into the high 50s to low 60s late in the period as a cold front moved through the area. No moisture was received. Producers considered spring planting options.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were lower.

No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Shippers reported Australian and Brazilian growths were competitively priced. Australia in particular has a high quality cotton carryover.

Unseasonably warm conditions continued in the SJV. Temperatures were in the high 60s to low 70s.

The dry spell for February continues. The California State Water Project, due to rain and an excellent Sierra Nevada Mountain snowpack in January, increased water allocations to 30 percent of requested amounts (up from 15 percent). Producers considered spring planting options.

American Pima (AP)

Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local prices were steady. No domestic mill activity was reported. Foreign mill inquiries were light. A total of 243,900 bales were committed to export sales for week ending February 18, compared to 125,800 bales last year, according to the Foreign Agricultural Service.

Higher-than-normal temperatures continued in the far west. Dry conditions continued in the region.

Planting was underway in Yuma, Arizona. Reports indicated that about 40 percent was planted and 5 percent germinated. Field preparations continued in California, New Mexico, and El Paso, Texas. The California State Water Project, due to rain and an excellent Sierra Nevada Mountain snowpack in January, increased water allocations to 30 percent of requested amounts (up from 15 percent).

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2015 and 2016-crop cotton, color 41, leaf 4, and staple 34 and longer for third and fourth quarter 2016 delivery. Reports indicated most mills have covered their immediate-to-nearby raw cotton needs. Demand for ring-spun yarn was good; open-end demand had tapered at some locations. Most mills operated five to seven days.

Demand through export channels was moderate. Demand was good throughout the Far East for any discounted styles of cotton.

Regional Price Information

Southeastern Markets

A light volume of color 31 and 41, leaf 3 and 4, staple 36-38, mike 37-49, strength 28-31, and uniformity 80-82 sold for around 62.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Central Markets

North Delta

No trading activity was reported.

South Delta

No trading activity was reported.

Southwestern Markets

East Texas

In Oklahoma, a moderate volume of color 31 and 41, leaf 4 and better, staple 37 and longer, mike 30-33, strength 30-32, uniformity 79-82, and 50 percent extraneous matter sold for around 59.00 cents per pound, FOB car/truck (compression charges not paid).

A heavy volume of color 32 and better, leaf 4 and better, mostly staple 35 and 36, mike averaging 43.8, strength averaging 31.3, and uniformity averaging 80.2 sold for around 50.75 cents, same terms as above.

A mixed lot containing a heavy volume of color 41, leaf 4 and 5, staple 35 and longer, mike 31-41, strength 24-30, uniformity 75-80, and 100 percent extraneous matter sold for around 49.75 cents, same terms as above.

A moderate volume of mostly color 41 and 32, leaf 4-6, staple 35 and longer, mike 37-44, strength 28-34, uniformity 78-82, and 50 percent extraneous matter sold for around 48.75 cents, same terms as above.

West Texas

A heavy volume of color 31 and better, leaf 4 and better, mostly staple 36-38, mike averaging 39.1, strength averaging 32.0, uniformity averaging 81.5, and 50 percent extraneous matter sold for around 56.00 cents per pound, FOB car/truck (compression charges not paid).

A mixed lot containing a moderate volume of color 42 and better, mostly leaf 3 and 4, staple 34 and longer, mike 41-50, strength 28-33, and uniformity 78-82 sold for around 55.00 cents, same terms as above.

A mixed lot containing a heavy volume of mostly color 22 and better, leaf 2-4, staple 35 and longer, mike 29-44, strength 27-31, and uniformity 77-83 sold for around 53.50 cents, same terms as above.

A heavy volume of color 41 and better, leaf 4 and better, mostly staple 37, mike 32-38, strength 25-32, and uniformity 79-81 sold for around 51.50 cents, same terms as above.

Western Markets

Desert Southwest

A heavy volume of AZ cotton, color 31 and 41, leaf 3 and better, staple 35 and longer, mike averaging 45.0, strength averaging 29.9, and uniformity averaging 80.0 traded for around 250 points off ICE May futures, uncompressed, FOB warehouse.

A heavy volume of NM cotton, color 31 and 41, leaf 4 and better, staple 35 and longer, mike averaging 40.1, strength averaging 31.0, and uniformity averaging 80.3 traded for around 58.00 cents per pound, FOB car/truck (compression charges not paid).

San Joaquin Valley

No trading activity was reported.

American Pima

A moderate volume of 2016-crop contracting was reported.

LEAVE A REPLY