USDA-Weekly Cotton Market Review: July 29, 2016

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Spot cotton quotations were virtually unchanged from 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 71.37 cents per pound for the week  ended Thursday, July 28, 2016. The weekly average was down from  71.42 cents last week, but up from  61.24 cents reported the  corresponding period a year ago. Daily average quotations ranged  from a low of 70.48 cents Monday, July 25 to a high of 72.13 cents  Wednesday, July 27. Spot transactions reported in the Daily Spot  Cotton Quotations for the week ended July 28 totaled 3,977 bales.  This compares to 9,741 bales reported last week and 2,718 spot  transactions reported the corresponding week a year ago. Total  spot transactions for the season were 1,523,422 bales compared  to 2,106,347 bales the corresponding week a year ago. The ICE  October settlement prices ended the week at 73.02 cents,  compared to 72.66 cents last week.

Prices are in effect from July 29–August 4, 2016 
    
Adjusted World Price (AWP)        65.50       ELS Competitiveness Payment           0.00 
Loan Deficiency Payment (LDP)     0.00        Fine Count Adjustment 2015 Crop          1.30 
Coarse Count Adjustment (CCA)     0.00        Fine Count Adjustment 2016 Crop          1.40 
Source:  Farm Service Agency, FSA, USDA

Weekly Quality Summary

The Weekly Cotton Quality reports for the week ending July 28, 2016  shows that the Corpus Christi Classing Office began grading during  the period. The Corpus   Christi Classing Office graded 9,659 samples  for the week ending July 28. The weekly report showed color grade 21  was the predominate color grade, and leaf grade 2 was the predominate  leaf grade. Staple length averaged 36.0, mike 4.5, strength 29.9, and        uniformity averaged 82.0. Complete quality reports can be found at  http://www.ams.usda.gov/cnmnreports.

Regional Summaries

Southeastern Market  

Spot cotton trading was inactive.  Supplies were light.  Demand  was light.  Average local spot prices were steady.  Trading of  CCC-loan equities was inactive.        Fair-to-mostly sunny conditions were observed across most of  Alabama, south Georgia, and the Florida panhandle during the  period with daytime high temperatures in the upper 80s to mid-90s.

The crop made normal progress under  seasonably hot and humid weather.

Afternoon pop-up showers brought around one-quarter to one-half of an  inch of beneficial moisture to portions of the Gulf Coast and southwest  Georgia.  Clear and sunny conditions prevailed across the Carolinas and  Virginia during the week with daytime highs in the low 90s to low 100s.

Spotty shower activity brought light scattered rainfall to portions of  Virginia and coastal North Carolina, but rainfall totals generally  measured less than one-quarter of an inch.  Squaring neared completion  across the region and boll-setting advanced ahead of the five-year  average in Alabama and Georgia, but lagged about two weeks behind in  the upper Southeast due to unfavorable spring conditions which delayed  planting.  In Georgia and Alabama, cotton was approaching or had begun  to cut-out on earlier planted dryland acreage.  On irrigated acreage,  producers were maintaining watering schedules and making fungicide  applications to combat Target Spot foliar disease and applying  growth-regulators to control excessive growth.  Insect pressure varied;  scouts monitored fields and some locations were treated for aphids,  bollworms, plant bugs, and stink bugs.  In the Florida panhandle, local  experts reported good fruit loads and minimal insect pressure; producers  were hand pulling Palmer amaranth pigweed escapes.  In the Carolinas and  Virginia, producers reported good fruit retention and insect pressure was  mixed; pressure from aphids had tapered in areas, but fields were monitored  for bollworms and stink bugs and treated as necessary.

South Central Markets

North Delta

Spot cotton trading was inactive.  Supplies of available cotton were  light.  Demand was light.  Average local spot prices were steady.

Trading of CCC-loan equities was inactive.  No forward contracting was reported.

Hot, dry, but humid climatic conditions remained in place throughout  most of the period.  Heat advisories were in effect as temperatures  soared into the high 100s.  Overnight temperatures were in the low 70s.     Pop-up thundershowers brought up to 2 inches of much needed moisture to  isolated locales late in the period.  A general rain was needed to ease  pressure on irrigation systems and to help moderate temperatures.

According to the U.S. Drought Monitor, abnormally dry areas continued to  expand in central Arkansas and western Tennessee.  The crop made normal  progress under fair conditions, except in Missouri where the crop advanced  slowly.  Fields were treated for bollworms, plant bugs, and spider mites.

Plant growth regulators were used to contain excess vegetative growth.

According to the National Agricultural Statistics Service (NASS) Crop Progress  report released July 25, boll setting had reached 97 percent in Arkansas, 34  in Missouri, and 55 percent in Tennessee.   NASS also reported that the crop  was in good-to-excellent condition in Arkansas and Tennessee and fair-to-good  condition in Missouri.  Local experts reported that most fields had heavy boll  loads and little shedding.

South Delta

Spot cotton trading was slow.  Supplies of available cotton were light.

Demand was light.  Average local spot prices were steady.  Trading of CCC-loan  equities was moderate. No forward contracting was reported.

Hot, humid conditions continued to dominate the weather pattern during the  period.  Advisories were in effect with heat indexes registering in the high 100s.

Nighttime lows were in the mid-70s.  Scattered thundershowers brought some moisture  and respite from the heat to some areas.  Parts of central Mississippi received as  much as 2 inches of rain.  According to the U.S. Drought Monitor, areas of moderate  and severe drought showed little improvement during the period in Louisiana and  Mississippi.  Irrigation systems were operating at full capacity to ensure normal  crop development.  The crop made good progress overall.   The stage of development  ranged from 2 to 8 nodes above white flower. Fields were carefully monitored for aphids,  bollworms, plant bugs, and stink bugs.  Treatments were applied to control infestations.

Producers also applied plant growth regulators.  According to the National Agricultural  Statistics Service (NASS) Crop Progress report released July 25, boll setting had  reached 76 percent in Louisiana and 72 percent in Mississippi. NASS reported that  the crop remained in fair-to-good condition. Some boll shedding was reported in Mississippi.

Southwestern Markets

East Texas-Oklahoma    

Spot cotton trading was slow.  Supplies were light.  Demand was moderate.

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

Forward contracting was moderate.  Foreign mill inquiries were moderate. The Corpus Christi Classing Office began grading samples during the period.  In Texas, the crop was rated mostly fair-to-good and squaring was at 82 percent,  in line with the five-year average of 80 percent, according to the National  Agricultural Statistics Service (NASS) Crop Progress report released July 25.

In the Rio Grande Valley, harvesting and ginning continued at a steady pace under  hot, clear conditions.  Modules were delivered to gin yards for processing.

In the Coastal Bend, picker-harvesting expanded.  Some of the gins had begun  pressing operations.  In eastern Texas, intermittent showers brought trace amounts  of precipitation to some fields, but more rainfall would increase yield potential  ahead of harvesting.  Ginning and harvesting is estimated around four weeks away.

In Kansas, the crop was rated mostly fair-to-good and squaring was at 53 percent,  ahead of the five-year average of 66 percent, according to NASS.  Local experts  reported that the crop was blooming and had a good boll load.  Moderate weed issues  were being managed.  In Oklahoma, squaring was at 65 percent, behind the five-year  average of 61 percent, according to NASS.  Boll setting was reported at 19 percent,  near the five-year average of 22 percent.  The crop was rated mostly fair-to-good.

West Texas   

Spot cotton trading was slow.  Supplies and producer offerings were light.  Demand  was light.  Average local spot prices were steady.  Trading of CCC-loan equities was  active.  Forward contracting was moderate.  Foreign mill inquiries were moderate.           State-wide, the crop was rated mostly fair-to-good and squaring was at 82 percent,  near the five-year average of 80 percent, according to the National Agricultural  Statistics Service Crop Progress report released July 25.  Boll setting was 36  percent completed, ahead of the five-year average of 30 percent. Intermittent  rain showers brought a trace to one-quarter of an inch of precipitation to some fields.

More rainfall is needed to help alleviate heat stress and encourage plant health.  Some  dryland fields stalled, and some struggled in parched soils.  Irrigated stands progressed  with daytime temperatures in the upper 90s and low 100s.  Nighttime temperatures were  in the low to mid-70s.  Local industry experts reported that most plants had established  a foundation for a good boll load.  Insect pressure was light.  Hoe crews were in the  fields manually removing resistant and non-resistant weed populations.  Reoccurring  regional meetings were attended.

Western Markets

Desert Southwest (DSW)  

Spot cotton trading was inactive.  Supplies and demand were light.  Average  local prices were steady.  No domestic mill activity was reported.

Foreign mill inquiries were light.

Temperatures were in the mid-100s to low 110s in Arizona.  Scattered thunderstorms  produced one-tenth of an inch of precipitation in Safford, Arizona.  Bolls  were cracking open in Yuma and producers prepared for defoliation activities.

The crop made good progress in central Arizona and Safford. Producers managed  the crop for heat stress with irrigation.  Little-to-no insect pressures were  reported.  The University of Arizona Cooperative Extension started a project to  research and support proactive resistance management of whiteflies that impact  many important crops (including cotton) in Arizona.  They began collecting whiteflies  for testing resistance to whitefly insecticides.  Triple-digit temperatures were the  norm for southern New Mexico and El Paso, Texas.  Monsoon moisture produced afternoon  thunderstorms, which deposited around one-tenth of an inch of rainfall.  Clouds and  scattered showers helped the crop get a break from the heat.  Sources reported the  El Paso County crop was thriving and blooming. Plenty of irrigation water was  available, as the El Paso County Water Improvement District 1 provided producers  with 3.5 acre feet of water, up from the initial allocation of 2 acre feet.

The heat was taking a toll on the cotton fields in Hudspeth County.  The crop  was considered slightly behind and water supplies were tight.  Irrigation water  tended to have a heavier salt concentration from well pumping.

San Joaquin Valley (SJV)

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

Foreign mill inquiries were light.          Hot, dry conditions continued with temperatures in the 100s.  Producers managed  the crop for heat stress with irrigation.  The crop reached peak bloom.  Boll  development and setting made good progress.  No significant insect pressures were reported.

American Pima (AP)  

Spot cotton trading was inactive.  Supplies and demand were light. Average local  prices were steady.    Foreign mill inquiries were light.  Shippers offered mixed  lots, but no new sales were reported.          Hot, dry conditions allowed the crop to make excellent progress in the Far West.

Widespread blooming and boll setting was reported in Arizona, California, New Mexico,  and El Paso, Texas.  Bolls were cracking open in Yuma, Arizona and producers prepared  equipment for harvesting and defoliation activities.

Textile Mill    

Domestic mill buyers purchased a light volume of 2015-crop cotton, color 42 and  better, leaf mostly 4 and better, and staple 37 and longer for January through  March 2017 delivery.  Mill buyers also inquired for a moderate volume of 2016-crop  cotton, color 41 and better, leaf 4 and better, and staple 34 and longer for first  quarter 2017 delivery.  No additional sales were reported.  The undertone from mill  buyers remained cautious; finished product demand and retail sales activity was  reported as sluggish.  Most mills operated four to seven days.          Demand through export channels was moderate.  Turkish mill buyers purchased a  moderate volume mixed lot containing color 42 and better, leaf 5 and better, and  staple 37 and longer for nearby shipment. Agents for mills in Vietnam purchased a  moderate volume of color 41, leaf 4, and staple 34 for nearby shipment.   Demand  was best throughout the Far East 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   

A moderate volume of CCC-loan equities traded for 5.00 to 7.00 cents per pound.

Southwestern Markets

East Texas  

In Texas, a light volume of 2015-crop cotton color 43 and 53, leaf 3,  staple 34 and 35, mike 46-47, strength   27-30, and uniformity 78-79 sold  for around 56.00 cents per pound, FOB car/truck (compression charges not paid).

A light volume of 2015-crop cotton color 53 and better, leaf 4 and better,  staple 34 and 35, mike 46-51, strength 26-28, and uniformity 77-78 sold for  around 52.00 cents.

A light volume of CCC-loan equities traded for 3.00 to 11.50 cents.

West Texas  

A light volume of 2015-crop cotton mostly color 41, leaf 8, staple 33 and  longer, mike averaging 41.5, strength averaging 29.1, and uniformity  averaging 79.7 sold for around 44.00 cents per pound, FOB car/truck  (compression charges not paid).

A light volume of 2015-crop cotton mostly color 41, leaf 8, staple 33  and longer, mike 34-48, strength 25-32, and uniformity 76-81 sold for  around 41.00 cents, same terms as above.

A light volume of CCC-loan equities traded for 3.25 to 11.50 cents.

Western Markets

Desert Southwest  

A heavy volume of 2016-crop Arizona cotton for contract base quality  color 31, leaf 3, and staple 35 was forward contracted at around even  to 100 points on ICE December futures.  These contracts were subject  to government discounts with no premium paid for qualities better than  the contract base quality.

A moderate volume of 2016-crop Arizona cotton for contract base quality  color 21, leaf 2, and staple 36 was forward contracted for around 100 to  150 points on ICE December futures.  These contracts were subject to   government discounts with no premium paid for qualities better than the  contract base quality.  A light volume of 2016-crop New Mexico cotton was forward contracted for  around 73.00 to 75.00 cents per pound,  FOB warehouse.

San Joaquin Valley  

No trading activity was reported.

American Pima   

A moderate volume of San Joaquin Valley 2016-crop Pima color 2, leaf 2,  and staple 46 was forward contracted for around 130.00 cents per pound,  UD free, FOB warehouse.

FULL REPORT

 

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