USDA-Weekly Cotton Market Review: June 3, 2016

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Spot cotton quotations were 90 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 61.80 cents per pound for the week ended Thursday, June 2, 2016. The weekly average was up from 60.90 cents last week, but down from 62.52 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 62.59 cents Friday, May 27 to a low of 61.09 cents Thursday, June 2. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 2 totaled 6,217 bales. This compares to 9,353 bales reported last week and 8,354 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,453,541 bales compared to 2,072,760 bales the corresponding week a year ago. The ICE July settlement prices ended the week at 62.87 cents, compared to 64.33 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #17 FOR UPLAND COTTON June 2, 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 June 9, 2016, allowing importation of 14,130,218 kilograms (64,899 bales) of upland cotton.  Quota number 17 will be established as of June 9, 2016, and will apply to upland cotton purchased not later than September 6, 2016, and entered into the U.S. not later than December 5, 2016.

The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period January 2016 through March 2016, 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.

Prices are in effect from June 3-9, 2016  Adjusted World Price (AWP)      53.75              ELS Competitiveness Payment           0.00 Loan Deficiency Payment (LDP)    0.00              Fine Count Adjustment 2015 Crop       0.00 Coarse Count Adjustment (CCA)    0.00              Fine Count Adjustment 2016 Crop       0.00 Source:  Farm Service Agency, FSA, USDA

Regional Summaries

Southeastern Market

Spot cotton trading was inactive.  Supplies were moderate.  Demand was moderate.

Average local spot prices were higher. Trading of CCC-loan equities was inactive.

 Mostly sunny to partly cloudy conditions were observed across Alabama, the Florida panhandle,   and Georgia during the period, with warm daytime high temperatures in the upper 80s to lower 90s.  Planting activity advanced and fieldwork remained uninterrupted during the week.  Producers would welcome a soaking rainfall in most areas to help recharge subsoil moisture and invigorate emerging seedlings.

Moderate drought conditions had developed across portions of northern Alabama, and replanting was underway in fields that remained too dry.  In Georgia, pressure from thrips was heavy    and producers were actively spraying fields.  Scouts were also monitoring fields for glyphosate-resistant Palmer amaranth (pigweed) that escaped herbicide programs.  Mostly cloudy conditions prevailed over the Carolinas and Virginia during the period with daytime highs in the upper 70s to upper 80s.

Scattered shower activity brought around one and  one-quarter inches of weekly accumulated moisture to portions of South Carolina’s coastal plain, with lesser accumulations farther inland.  Day-to-day precipitation totals measured from trace amounts to around one-half of an inch in North Carolina and Virginia.  Wet conditions delayed planting activity and fieldwork in areas where soils remained too saturated to support equipment.  Sunny conditions late in the period allowed producers to enter fields where conditions were drier, and race to finish planting ahead of additional wet weather in the forecast.  Pressure from thrips was also being reported in the Carolinas.  In the upper Southeastern region, planting progress lagged behind the five-year average by double digits according to the National Agricultural Statistics Service’s Crop Progress report.

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.

 Intermittent rain showers interspersed with clear, sunny skies dominated the weather pattern during   the period.   Up to 3 inches of moisture was reported, mainly in northeastern Arkansas and the Bootheel    of Missouri.  Some damage to emerging seedlings was reported in areas that experienced high-intensity precipitation.  Daytime temperatures were in the upper 80s.  Overnight lows were in the 60s.  The cool nighttime temperatures slowed plant development enough to increase susceptibility to infestations of thrips.

In drier areas, producers reported outbreaks of spider mites in areas previously treated for thrips.  Producers were also treating fields with herbicides   to control weeds.

According to the National Agricultural Statistics Service (NASS) Crop Progress report for the week ending May 29, planting in Arkansas advanced to 99 percent completed.

In Missouri, no planting progress was reported as producers continued to cope with wet field conditions and the replanting of flood-damaged acreage.  Planting advanced rapidly in Tennessee to 89 percent completed; squaring was reported to have reached 11 percent, according to NASS.

South 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, wet weather conditions prevailed during most of the period.  Sporadic rain showers alleviated dry conditions in some places, while other areas remained dry.

Up to 2 inches of moisture was reported in areas that received the heaviest amounts of precipitation.  Daytime temperatures were in the 80s and overnight temperatures were in the 60s to 70s.  Producers welcomed rain showers, which promoted germination and the activation of herbicides.  Irrigation continued in areas that missed the rainfall.

Fields were scouted for weed and insect pests including thrips, spider mites, and fleahoppers.

Treatments were made as necessary to control outbreaks and hotspots in both categories.

According to the National Agricultural Statistics Service (NASS) Crop Progress report for the week ending May 29, planting advanced steadily to 91 percent completed in Mississippi, about one week ahead of the five-year average.  Planting progressed at a moderate pace in Louisiana to reach 92 percent; squaring was underway and was reported to have reached 2 percent, according to NASS.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was slow.  Supplies, producer offerings, and demand were light.

Average local spot prices were higher.  Trading of CCC-loan equities was slow.

Foreign mill inquiries were moderate.

 Cotton in the Rio Grande Valley presented small to medium sized bolls, according to the Pest Cast newsletter.  Some fields were treated for plant pests.  Stands progressed in southern Texas.  Most of the fields in the Blackland Prairies were planted, but were waterlogged and need a period of warmer temperatures and sunshine.  The earlier fields that had been replanted were mostly established, but the most recent replanted stands struggled.  Planting in Kansas is mostly complete.  Thunderstorms interfered with final planting activities.  Oklahoma received varying amounts of beneficial rainfall.  Stands had emerged in most fields.

West Texas 

Spot cotton trading was slow.  Supplies, producer offerings, and demand were light.

Average local spot prices were higher.  Trading of CCC-loan equities was slow.  Foreign mill inquiries were moderate.

 Wet, humid conditions prevailed during the period.  The majority of fields were planted before the heavy rainfall.  Most areas received moisture, and some areas received heavy rainfall that saturated fields.  Stands advanced.  Planting was completed in the panhandle and some planting continued in the Southern Rolling Plains.  The crop is in need of sunshine and warmer conditions.

Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive.  Supplies of premium quality lots were light.  Demand was light.  Shippers offered mixed lots, but no new sales were reported.  Average local prices were higher.  Producers inquired for 2016-crop contracts.  No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light.   Competitive growths, especially Australian high grades held mill interest, as US supplies were light.

 Temperatures were in the high 90s for most of the week in western and central Arizona.

Excessive heat warnings were in effect late in the period as temperatures rose to the mid-100s.

No moisture was recorded in the period.  Heat stress will become a factor.  Producers will manage the crop with irrigation.  Industry representatives reported that the additional heat will be welcomed as a moderate amount of re-planting was done and will help the crop catch up in central Arizona.  The crop was squaring in Yuma, Arizona and in Blythe, California.

Spring weather events continued to test the crop in New Mexico and El Paso, Texas.  Scattered thunderstorm activity, wind,  and hail damaged a light amount of acreage in New Mexico early in the period.  Cotton-growing areas of New Mexico and El Paso, Texas received one-tenth to one-quarter of an inch of rainfall.

San Joaquin Valley (SJV)

Spot cotton trading was inactive.  Supplies and demand were light.  Average local prices were higher.  No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light.  Competitive growths, especially Australian high grades, held mill interest as US supplies were light.

 Temperatures were in the mid-to-high 90s for most of the period.  Triple-digit heat with temperatures in the low-to mid-100s were recorded late in the period.  The crop made good progress.

American Pima (AP)

Spot cotton trading was inactive.  Supplies for 2014-crop cotton were moderate, but light for 2015.  Demand was light.  Average local prices were steady.  No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light, but were good for color 2, leaf 2, and staple 48.  Interest was best from India and Korea.

 A ridge of high pressure off the Pacific Coast kept temperatures in the 90s and into the mid-100s for Arizona and California.  Overall, industry representatives reported the crop in mostly good condition in the Far West.

Textile Mill 

Domestic mill buyers inquired for a moderate volume of 2016-crop cotton, mostly color 41, leaf 4, and staple 34 and longer for fourth quarter 2016 and first quarter 2017 delivery.

No sales were reported.  Tapering finished product demand had caused a few mills to cancel or delay delivery of previously purchased raw cotton to keep inventories from building.

Most mills operated four to seven days.

 Demand through export channels was moderate.  Agents throughout the Far East inquired for any discounted or low-grade styles of cotton.

Regional Price Information

Southeastern Markets

No trading activity was reported.

South Central Markets

North Delta

No trading activity was reported.

South Delta

No trading activity was reported.

Southwestern Markets East Texas In Oklahoma, a light volume of color 31, leaf 2 and 3, staple 35 and 36, mike 41-48, strength 31-34, and uniformity 80-83 sold for around 61.00 cents per pound, FOB car/truck (compression charges not paid).

Mixed lots containing a heavy volume of mostly color 41 and better, leaf 3-5, staple 36 and longer, mike averaging 37.4, strength averaging 31.0, uniformity averaging 80.5, and 25 percent extraneous matter sold for around 52.25 cents, same terms as above.

In Kansas, a heavy volume of color 41 and 51, leaf mostly 5 and 6, staple 35, mike 35-46, strength 26-31, uniformity 76-81, and 100 percent extraneous matter sold for around 54.00 cents, same terms as above.

A light volume of CCC-loan equities traded for around 2.75 cents.

West Texas

A light volume of organic cotton, mostly color 31, leaf 3 and 4, staple 35 and 36, mike averaging 45.1, strength averaging 31.4, and uniformity averaging 80.3 sold for around 60.25 cents per pound, FOB car/truck (compression charges not paid).

Mixed lots containing a light volume of mostly color 41 and 42, leaf 6 and better, staple 35 and longer, mike 30-50, strength 29-32, uniformity 79-81, and 75 percent extraneous matter sold for around 53.00 cents, same terms as above.

A light volume of mostly color 41 and 42, leaf 7 and better, staple 36 and longer, mike 36-40, strength 28-32, and uniformity 79-81 sold for around 51.00 cents, same terms as above.

A light volume of CCC-loan equities traded for around 3.00 cents.

Western Markets

Desert Southwest

In New Mexico, a light volume of color 32 and better, leaf 5 and better, staple 35 and 36, mike averaging 41.5, strength averaging 30.8, and uniformity averaging 80.8 traded for around 52.00 cents per pound, FOB car/truck (compression charges not paid).

San Joaquin Valley

No trading activity was reported.

American Pima No trading activity was reported

Full report

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