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Weekly Cotton Market Review – USDA

September 4, 2015
From USDA

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Prices are in effect from September 4 – September 10, 2015

Adjustment World Price (AWP) – 46.60
ELS Competitiveness Payment – 0.00
Loan Deficiency Payment (LDP) – 5.40
Fine Count Adjustment 2014 Crop – 0.00
Coarse Count Adjustment (CCA) – 0.00
Fine Count Adjustment 2015 Crop – 0.00
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #4 FOR UPLAND COTTON September 3, 2015

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 September 10, 2015, allowing importation of 15,287,174 kilograms (70,213 bales) of upland cotton. Quota number 4 will be established as of September 10, 2015, and will apply to upland cotton purchased not later than December 8, 2015, and entered into the U.S. not later than March 7, 2016.

The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2015 through June 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 Markets

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

Remnants of hurricane Erica brought scattered precipitation to areas throughout South Carolina entering the period. Rainfall amounts were variable, but areas that experienced the heaviest accumulations reported around two inches or more of moisture. The rainfall relieved droughty conditions and improved soil moisture, but also had the potential to negatively impact quality and yield in the earliest-planted fields where bolls had cracked open.

Local experts were scouting fields to assess crop damage. Portions of central and eastern North Carolina and Virginia received around one-quarter to one inch of rainfall. Thunderstorm activity brought light-to-moderate scattered precipitation to portions of central and coastal Alabama, the Florida panhandle, and south Georgia entering the weekend.

Rainfall totals measured from trace amounts to around one-quarter of an inch in areas that experienced the heaviest accumulations. Mid-week shower activity brought around one-half of an inch to three-quarters of an inch of additional moisture to southeast Georgia and interrupted fieldwork. Mostly cloudy and overcast conditions prevailed across the region in between rain events with daytime highs in the mid-80s to mid-90s. Insect pressure was generally light-to-moderate. In Georgia, reports indicated that picking had begun in some of the earliest planted fields.

According to the National Agricultural Statistics Service, boll opening advanced to 32 percent in Alabama, 30 in Georgia and South Carolina, 28 in North Carolina, and 23 percent opened in Virginia.

South Central Markets

North Delta

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Warm, clear conditions prevailed during the week. No precipitation was reported. Daytime temperatures were in the low 90s and nighttime temperatures were in the low 70s. Most of the crop has finished the growth stage of development. Producers completed final irrigations. Topsoil moisture supply was rated at mostly adequate to surplus. A few late-planted fields were treated for plant bugs in Arkansas and Missouri.

Producers continued to battle target spots in some fields in Arkansas. Limited defoliation was expected to begin soon. According to the National Agricultural Statistics Service, boll opening advanced slowly to 21 percent in Arkansas, 12 in Missouri, and 13 percent in Tennessee. Overall, the crop remained behind the five-year average. Cotton extension specialists reported that the crop was in mostly good condition.

South Delta

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Mostly clear, cool conditions prevailed during the week. Daytime temperatures were in the low 90s. Nighttime temperatures dipped into the upper 50s. No rainfall was reported. Most of the crop was finishing up. Irrigation and crop protection measures had ended for the season. Defoliation had begun on a limited basis. Most producers were preparing to begin applying defoliants within the next week.

According to the National Agricultural Statistics Service, boll opening reached 58 percent in Louisiana and 43 percent in Mississippi. The crop remained behind the five-year average in Louisiana despite making excellent progress, but slightly ahead in Mississippi. Local experts reported that the crop was in mostly good condition.

Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was very light. Average local spot prices were firm. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light.

Harvesting continued in the Rio Grande Valley (RGV) and in south Texas. Heavy rain delayed field activities and interrupted harvesting. Harlingen received approximately one inch of rainfall and Brownsville received five to six inches of precipitation on August 31. Industry experts reported that approximately 75 percent of fields had been harvested in the RGV.

Defoliants and boll openers were applied in the Blackland Prairies on mature fields. Harvesting had begun on early-planted acres. Some gins began pressing operations. Progress varied between fields depending on the planting dates. Some fields suffered from a lack of moisture. The Corpus Christi Classing Office expanded operations to accommodate the increase of sample receipts.

In Kansas, final irrigation was applied on some fields. Light rainfall and warmer conditions helped advance the crop.

Field activity was light. In Oklahoma, the crop continued about two weeks behind normal progress. Sunshine is needed to build heat units. Daytime temperatures were in the upper 90s, and nighttime temperatures were in the lower 70s. Irrigation ended. According to the Oklahoma Boll Weevil Eradication Organization, around 202,000 acres of cotton was planted. Regional meetings were attended.

West Texas

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was very light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light.

Dry, hot conditions prevailed. Irrigation continued in some counties, but ended in other counties. Some dryland fields suffered and were stressed for moisture. Boll shedding was reported. Rainfall would be helpful to retain fruit. Bolls had begun to pop open. Abandonment is low according to industry experts. Producers continued mid-season weed management practices to promote better yield and higher quality at harvest. Insect pressures were light. Meetings were attended.

Western Markets

Desert Southwest (DSW)

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

Thunder and lightning accompanied an intense monsoon storm that hit central Phoenix on August 31. Three-quarters of an inch to one and one-quarter inches of rainfall was received. Strong winds downed trees and some local flooding was reported. Temperatures ranged from the mid-to-high 90s in the period.

Defoliation and harvesting activities continued in Yuma, Arizona. Modules accumulated in fields and gin yards. No ginning was reported. Isolated afternoon showers were reported in New Mexico and El Paso, Texas. Temperatures remained in the high 90s to low 100s. The crop made good progress.

San Joaquin Valley (SJV)

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

The crop continued to make good progress. Some industry representatives were concerned about insect damage and its effect on yields. Producers prepared equipment for harvest.

American Pima (AP)

Spot cotton trading was active. 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. AP prices were under pressure as mills remained on the sidelines.

Temperatures were lower in the period for Arizona and California as an off-shore flow kept temperatures in the high 90s and the high 80s. Central Arizona received three-quarters to one and one-quarter of an inch of monsoon moisture early in the period. Defoliation and harvesting continued in Yuma, Arizona. Modules accumulated in fields and gin yards. Ginning was set to begin around September 7. The crop in central Arizona made good progress.

The San Joaquin Valley crop fast approached cut-out. Industry experts were anxious about first pick yields as the crop was under lygus pressure and continuing drought conditions. Producers prepared equipment for harvest. Shippers, producers, and industry representatives attended regional meetings. The crop made good progress in New Mexico and El Paso, Texas.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2015-crop cotton, color 41 and better, leaf 4 and better, and staple 34 and longer for fourth quarter 2015 through second quarter 2016 delivery. No sales were reported. Reports indicated demand for open-end and ring-spun yarn remained strong. Most mills operated five to seven days; a few mills planned one to two days of down time for the Labor Day holiday.

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

Regional Price Information