USDA-Weekly Cotton Market Review: August 11, 2017

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Average quotations were 13 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 66.98 cents per pound for the week ending Thursday, July 6, 2017.

USDA-Weekly Cotton Market Review: August 11, 2017

The weekly average was up from 66.85 last week and from 63.56 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 67.94 cents Friday, June 30 to a low of 66.42 cents Monday, July 3.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 6 totaled 375 bales. This compares to no bales reported last week and 1,780 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,563,825 bales compared to 1,469,153 bales the corresponding week a year ago.

The ICE October settlement prices ended the week at 69.47 cents, compared to 69.05 cents last week.

Prices are in effect from July 7-13, 2017

  • Adjusted World Price (AWP) – 65.33
  • ELS Competitiveness Payment – 0.00
  • Loan Deficiency Payment (LDP) – 0.00
  • Fine Count Adjustment 2016 Crop – 0.00
  • Coarse Count Adjustment (CCA) – 0.00
  • Fine Count Adjustment 2017 Crop – 0.00
    Source: Farm Service Agency, FSA, USDA

USDA-Weekly Cotton Market Review: August 11, 2017USDA ANNOUNCES SPECIAL IMPORT QUOTA 9 & 10 FOR UPLAND COTTON July 6, 2017

The Department of Agriculture’s Commodity Credit Corporation announced that the news release issued on June 22 and June 29, 2017, for the Upland Cotton Special Import Quota (#9 and #10) failed to recognize that the U.S. Far East price did not exceed the prevailing world market price during the consecutive 4-week period ending on the date of the announcement. We regret the error.

When this condition (for any consecutive 4-week period, the U.S. Far East price exceeds the prevailing world market price) is met again in the future, a Special Import Quota announcement will be issued.

Regional Summaries

Southeastern Market

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were steady. Trading of CCC-loan equities was inactive. Widespread thunderstorms brought moderate rainfall to areas from north Alabama to South Carolina early in the period.

Locally heavy precipitation measured several inches in some areas. Sunny to partly cloudy conditions prevailed much of the period and daytime high temperatures warmed into the 90s mid-week.

Plants thrived under the hot, humid conditions and squaring was well underway. Boll-setting advanced in Alabama and Georgia. Late-week thunderstorms brought light precipitation to areas across the lower southeast. Fieldwork was limited in areas of south Alabama where soils remained waterlogged from excessive moisture received in recent weeks.

Weed control was becoming problematic in fields too soggy to support equipment. Mostly sunny to partly cloudy conditions prevailed in North Carolina and Virginia during the week. The crop thrived under the drier and warmer conditions, with daytime high temperatures in the low-to-mid-90s and boll-setting was just getting underway.

Producers scouted fields and applied sprays to combat plant bugs. According to the National Agricultural Statistics Service’s Crop Progress report released July 5, squaring reached 57 percent in Georgia and Virginia, 55 in Alabama, 53 in North Carolina, and 45 percent squared in South Carolina.

South Central Markets

North 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 inactive. No forward contracting was reported. Cloudy to partly cloudy conditions persisted during the period.

Intermittent thunderstorms during the week brought up to 2 inches of precipitation to the Memphis territory. The moisture was generally beneficial to the crop, except in fields saturated from previous storms. Daytime temperatures were in the 80s and 90s. Overnight lows were in the 60s to 70s.

The crop made excellent progress under good conditions. Producers were busy scouting fields for a variety of insect pests, including bollworms; treatments were applied as necessary to control outbreaks of plant bugs.

According to the National Agricultural Statistics Service Crop Progress report released July 5, boll setting reached 27 percent in Arkansas, 3 percent in Missouri, and 9 percent in Tennessee. NASS rated the crop condition at good to excellent.

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 inactive. No forward contracting was reported.

Scattered showers throughout the period brought around 3 inches of moisture to some areas, with lesser amounts reported generally. Daytime temperatures were in the 80s to 90s. Overnight lows were in the 60s to 70s. The crop made good progress in most areas.

Developing cotton plants would benefit from a period of hot, clear weather to allow for the accumulation of heat units, especially in late-planted fields. Producers were battling weeds in some of the wetter fields. Insect populations were carefully monitored, but most local experts reported that pressure was light. Control measures were taken as necessary to treat hotspots.

According to the National Agricultural Statistics Service Crop Progress report released July 5, boll setting reached 31 percent in Louisiana and 10 percent in Mississippi.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light and for new-crop cotton. Interest was best from China, Korea, and Mexico.

Hot, dry conditions made for perfect defoliation weather in the Rio Grande Valley. Initial harvesting began of dryland fields. Defoliation of irrigated fields will begin in about a week. Modules accumulated on gin yards and fields. Gins were ready for cotton. Ginning was expected to begin next week after electrical meters were read.

Sources reported a very good end to the growing season and above-average yields were expected. The Corpus Christi classing office was gearing up for a record classing season. Mostly dry conditions in east Texas and the Upper Coast allowed the crop to advance. Some sources reported the crop slightly ahead of schedule in the Upper Coast. Overall, the crop made good progress.

In Kansas, the crop made good progress. Herbicide drift damage was reported in some fields, which traveled from spraying weeds in fallow fields. Sources reported damage was light. Local experts indicated the Oklahoma crop made good progress after a rough start. The irrigated crop made good progress. The dryland crop development was described as a “mixed bag”.

Sources suspect that acreage in Kansas and Oklahoma could be higher than the acreage reported by the National Agricultural Statistics Service. The increase in acreage was attributed to growers, who had not planted cotton in several years and lower competitive crop prices.

A new cotton gin is being built in Carnegie, OK; it is expected to be operational for the 2017 season.

West Texas

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity
was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate for new-crop cotton for November/December 2017 shipment.
Interest was best from China, Korea, and Mexico.

Scattered shower activity continued through the period. Precipitation totals ranged from three-quarters of an inch to over 4 inches in areas around Lubbock north and into the Rolling Plains. Areas in the Lamesa territory received around one-tenth to one-quarter of an inch of moisture. The San Angelo area received around one and one-half inches. There was some hail and wind damage to the crop.

Saturated fields prevented producers from assessing how much of the crop is damaged. Soil moisture profiles were greatly improved by two weeks of showers and was especially beneficial for dryland acreage. Irrigated acreage was in excellent condition and progressing normally. The dryland crop was in various stages of development.

Some sources reported that some producers completed planting this week around Lubbock. Local representatives were in general agreement with the National Agricultural Statistics Service Acreage report released June 30 for Texas acreage planted; although some dryland producers replanted after insurance adjustments were made. Some representatives estimated that uninsured planted acreage could add an additional 100,000 to 150,000 acres to west Texas.

Western Markets

Desert Southwest (DSW)

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. Excessive heat warnings were issued for central and western Arizona as high temperatures reached 113 degrees. Nighttime lows were in the high 80s, which did not give cotton plants a break from the heat.

Producers irrigated the crop to minimize heat stress. Assessments from the previous hot spell were on-going. Overall, the crop made good progress. The Arizona Cotton Research and Protection Council has mapped about 166,631 acres of Upland cotton for the state. This mirrors closely to the 165,000 acres planted reported by the National Agricultural Statistics Service on June 30.

The crop made good progress in New Mexico and El Paso, Texas. Some fields were blooming in El Paso, Texas.

San Joaquin Valley (SJV)

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

Hot, dry conditions advanced the crop. Blooming progressed steadily in the most mature fields. Chemical treatments were made for lygus. The crop made good progress. Sources reported flooding concerns diminished as the mountain snowpack rapidly dwindled.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were good for 2016-crop cotton and light for new-crop. Interest was best from China and Thailand. Hot, dry conditions continued in the region.

Excessive heat warnings were issued for central and western Arizona as temperatures reached over the 110s mid-week. The Arizona Cotton Research and Protection Council has mapped about 13,723 acres of AP cotton for the state. This compares to 15,000 acres reported by the National Agricultural Statistics Service on June 30.

The crop made good progress in Arizona. Sources reported that damage from the previous hot spell was underway in central Arizona. There was concern about sterile flowers.

The San Joaquin Valley crop made excellent progress. Local experts reported that last week’s heat was a positive for the crop. Lygus treatments continued in some fields. The crop made good progress in New Mexico and El Paso, Texas.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2017-crop cotton, color 51 and better, leaf 5 and better, and staple mostly 34 and longer for fourth quarter 2017 and first quarter 2018 delivery. No sales were reported. Additional inquiries were light; most mills have covered their nearby raw cotton needs. Finished product demand was lackluster.

Most mills were down a few days to up to a week for the Independence Day holiday. Demand through export channels was moderate, but had improved due to lower ICE futures prices.

Agents for mills in Vietnam inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 for November/December shipment and January through March 2018 shipment.

Regional Price Information

Southeast

  • No trading activity was reported.

North Delta

  • A light volume of color 31 and better, leaf mostly 4 and better, staple 35 and longer, mike averaging 48.1, strength averaging 30.8, and uniformity averaging 81.2 traded at around 68.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color mostly 42 and better, leaf 5 and better, staple 34 and longer, mike averaging 48.6, strength averaging 31.1, and uniformity averaging 82.4 traded for around 68.50 cents, same terms as above.

South Delta

  • A light volume of color 31 and better, leaf mostly 4 and better, staple 35 and longer, mike averaging 48.1, strength averaging 30.8, and uniformity averaging 81.2 traded at around 68.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

East Texas

  • No trading activity was reported.

West Texas

  • No trading activity was reported.

Desert Southwest

  • A light volume of New Mexico cotton, color 21 and 31, leaf mostly 2, staple 35 and longer, mike averaging 48.0, strength averaging 29.7, and uniformity averaging 81.4 traded for around 66.75 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.

Forward Contracting

Forward contracting of 2017-crop cotton. Upland cotton growers in the United States had booked about 8 percent of their expected acreage by the end of June this season. This compares with 2 percent booked through the same period last year. Contracting has been most active in the Southeastern states, where about 13 percent of the crop was under contract by the end of June and compares with 3 percent a year earlier.

South Central states’ growers had forward contracted about 10 percent, compared with 7 percent in 2016. Southwestern states’ growers had booked 6 percent by the end of June, compared to less than 1 percent of the crop last year. Growers in the Western states had 4 percent booked, compared with 1 percent at the end of June 2016.

These estimates were based on the National Agricultural Statistics Board’s June Planted Acreage report and informal surveys made by the USDA, Agricultural Marketing Service, Cotton and Tobacco Program.

Full report:

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