Average spot cotton quotations were 198 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton 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 81.81 cents per pound for the week ended Thursday, January 30, 2014. The weekly average was down from 83.79 cents last week, but up from 76.56 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 83.19 cents on Friday, January 24 to a low of 80.64 cents on Monday, January 27.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 30, totaled 41,847 bales. This compares to 74,079 bales last week and 78,453 bales reported a year ago. Total spot transactions for the season were 1,038,855 bales, compared to 1,380,193 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 86.03 cents, compared to 87.33 cents last week.
Prices are in effect from January 31-February 6, 2014
Adjustment World Price (AWP) 70.37 ELS Competitiveness Payment 0.00
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2012 Crop 0.21
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2013 Crop 0.36
Source: Farm Service Agency, FSA, USDA
USDA ANNOUNCES SPECIAL IMPORT QUOTA #25 FOR UPLAND COTTON January 30, 2014
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 February 6, 2014 allowing importation of 13,544,062 kilograms (62,207 bales) of upland cotton. Quota number 25 will be established as of February 6, 2014, and will apply to upland cotton purchased not later than May 6, 2014, and entered into the U.S. not later than August 4, 2014. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2012 through February 2013, 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 of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Producers booked a moderate volume of 2014-crop cotton at 100 points off ICE December futures, including some premiums for staple lengths longer than the base grade.
Winter Storm Leon struck a severe blow to the region during the week. A wintry mix of up to four inches of snow and sleet blanketed the region from Alabama to Virginia. A state of emergency was declared in seven southern states. The heavy precipitation combined with freezing conditions created havoc, stranding tens of thousands of motorists and forcing the closure of airports, schools and businesses, including gins, and warehouses. The USDA Classing offices in Macon, Georgia and Florence, South Carolina were closed, due to the inclement weather. Industry members, who attended local and regional meetings experienced travel delays.
South Central Markets
North Delta
Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Merchants offered contracts at 300 points off ICE December futures. No forward contracting was reported.
Frigid temperatures returned to the area during the week, but the region missed the precipitation Winter Storm Leon brought to the southeast. Daytime high temperatures fluctuated from the upper teens to the mid-50s, while overnight night lows varied from the low teens to the upper 30s. A wintry mix of snow and sleet was reported in some areas. The freezing conditions forced the closure of several school districts, but roads remained open. Producers attended local and regional industry conferences and meetings. Particular interest focused on techniques to control the spread of glyphosate-resistant weeds and plant bugs.
South Delta Spot cotton trading was inactive. Supplies and producer offerings were very light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.
Winter Storm Leon caused weather-related problems in parts of Louisiana and Mississippi, including the closure of airports, roads, schools, and businesses. Snow and freezing conditions with widely varying temperatures prevailed during the week. Daytime high temperatures fluctuated from the low 40s to the low 60s, while overnight night lows ranged from the upper teens to the low 30s. Producers attended various industry meetings. Particular interest focused on the conservation of scarce water resources. Producers carefully monitored ICE futures prices, while considering their planting options.
Southwestern Markets
East Texas-Oklahoma
Spot cotton trading was moderate. Supplies were light. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Producer interest in forward contracting was good.
Sleet and freezing rain brought light amounts of beneficial precipitation to the Rio Grande Valley, but fields around Corpus Christi failed to receive any moisture. Beneficial precipitation was received in the Blackland Prairies. Some producers prepared fields ahead of planting, but most fieldwork was completed. In Kansas, ginning continued despite the arrival of a winter storm that brought bitter cold temperatures. Wintry precipitation was beneficial to some counties that received snow. In Oklahoma, approximately five gins continued pressing, but were expected to finalize seasonal operations by the weekend. Drought persisted in the southwestern part of the state. Meetings were well attended. Producers considered new seed varieties, herbicide management, and marketing opportunities. Some counties in Kansas, Oklahoma, and Texas were designated by the USDA as primary natural disaster areas due to the recent drought.
West Texas
Spot cotton trading was moderate. Supplies were moderate. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.
Fieldwork continued with high temperatures in the low 30s, to mid-70s later in the week. No significant precipitation was received in January. Producers plowed fields and built rows. Approximately 15 gins continued pressing operations during the week. Some gins planned to complete the season by the weekend. Marketing meetings and crop conferences were attended by industry members. Most counties in the territory were designated by the USDA as primary natural disaster areas due to the recent drought.
Western Markets
Desert Southwest (DSW)
Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was moderate. Average local prices were lower. No domestic mill activity was reported. Foreign mill inquiries were light.
Above normal temperatures continued in the mid-to-high 70s in Arizona. Producers began planting cotton in Yuma early in the reporting period. No rainfall was in the immediate forecast. Ginning continued in central Arizona. Central and eastern producers worked fields for spring plantings. Some producers planted alfalfa and durum wheat.
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.
Records were broken for many Central Valley towns when temperatures reached the high 70s early in the reporting period. The first precipitation for January was received late in the period. Traces of moisture up to one-third of an inch were recorded. Another dry winter in California will cause farmers to leave more land unplanted. Approximately 200,000 acres could be fallowed due to lack of irrigation water. Most producers will likely wait as long as they can to finalize their planting intentions. Some producers already decided to plant tomatoes in lieu of cotton.
American Pima (AP)
Spot cotton trading was inactive. Supplies and demand were light. Average local prices were steady. No forward contracting was reported. Foreign mill inquiries were moderate. Mills in Korea and Pakistan showed interest in low-grade AP. Interest was best from Germany for 2014-crop cotton.
Temperatures remained above normal for the far west. Cotton planting commenced in Yuma, Arizona early in the reporting period. Ginning continued in California. Dry conditions continued in California. Producers considered planting options and some decisions were made to fallow acreage in western Fresno County. If water supplies improve in the next month, planting intentions could switch to cotton.
Textile Mill Report
Domestic mill buyers purchased a heavy volume of color 41, leaf 3 and 4, and staple 36 and 37 for May/June delivery. Mill buyers purchased a moderate volume of color 53 and better, leaf 5 and better, and staple 32 and longer for December delivery. Demand was good for color 41, leaf 5 and better, and staple 35-36 for May through December delivery. Demand for open-end and ring-spun yarn was moderate. Most mills operated on a five to seven day schedule, but some experienced higher than normal rates of absenteeism, due to the severe weather conditions.
Demand through export channels was good. Representatives for mills throughout the Far East inquired daily for any discounted or low-grade styles of cotton.
Regional Price Information
Southeastern Markets
.. A moderate volume of color 41, leaf 4 and better, staple 36 and longer, mike 40-52, strength 27-35, and uniformity 78-85 sold for around 88.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
.. A moderate volume of color mostly 31 and better, leaf 3 and better, staple 36 and longer, mike 3549, strength 25-34, and uniformity 79-84 sold for around 88.25 cents, same terms as above.
.. A moderate volume of color mostly 41 and better, leaf 5 and better, staple 34 and longer, mike 3553, strength 24-32, and uniformity 79-84 sold for around 86.50 cents, same terms as above.
.. A heavy volume of color 51 and better, leaf 6 and better, staple 34 and longer, mike 42-52, strength 26-34, and uniformity 79-85 sold for around 86.00 cents, same terms as above.
.. A light volume of color 31 and better, leaf 4 and better, staple 35 and longer, mike 41-48, strength 27-33, and uniformity 78-84 sold for around 85.50 cents, same terms as above.
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 21, mostly leaf 1, staple 35, mike 37-40, strength 30-31, uniformity 81-82, and 50 percent extraneous matter (bark) sold for 83.00 to 85.00 cents per pound, FOB car/truck (compression charges not paid).
.. A light volume of color 21, mostly leaf 3, staple 35 and longer, mike 39-43, strength 29-31, uniformity 80-81, and 75 percent extraneous matter (bark) sold for 81.50 to 82.00 cents, same terms as above.
.. A light volume of color 21, mostly leaf 3, staple 35 and longer, mike 31-33, strength averaging 31.7, and uniformity averaging 80.2 sold for around 76.75 cents, same terms as above.
.. A light volume of color 41, leaf 4-6, staple 36 and longer, mike 29-32, strength 25-28, and uniformity 77-79 sold for around 71.00 cents, same terms as above.
West Texas
.. A moderate volume of color 11 and 21, leaf 3 and better, staple 36 longer, mike 35-46, strength 2733, and uniformity 78-82 sold for 83.50 to 85.50 cents per pound, FOB car/truck (compression charges not paid).
.. A light volume of color mostly 31 and better, mostly leaf 2, staple 34 and longer, mike 37-41, strength 27-30, and uniformity 77-80 sold for 82.00 to 82.50 cents, same terms as above.
.. Mixed lots containing a heavy volume of color 31 and better, leaf 3 and 4, staple 35 and longer, mike 30-36, strength 24-28, uniformity 78-80, and 75 percent extraneous matter (bark) sold for 73.00 to 74.50 cents, same terms as above.
.. Mixed lots containing a moderate volume of mostly color 31, leaf 3, staple 34 and 36, mike 36-50, strength 27-31, uniformity 79-82, and 50 percent extraneous matter (bark) sold for around 78.00 cents, same terms as above.
Western Markets
Desert Southwest
.. A moderate volume of color 31 and better, leaf 3 and better, staple 35 and longer, mike 35-49, strength averaging 29.0, and uniformity averaging 80.5 sold for 200 points on March ICE futures, uncompressed, FOB warehouse.
.. A light volume of mostly color 21 and better, leaf 2 and better, staple 35-37, mike 50-52, strength averaging 29.0, and uniformity averaging 80.7 sold for 250 points off March ICE futures, same terms as above.
San Joaquin Valley
.. No trading activity was reported.
American Pima
.. A moderate volume of new-crop American Pima cotton was sold to domestic mills.
