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Weekly Cotton Market Review – USDA

October 2, 2015October 4, 2015
From USDA

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Bagged cotton samples on gin floor. ©Debra L Ferguson Stock Photography

Spot cotton quotations averaged 39 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 58.82 cents per pound for the week ended Thursday, October 1, 2015.

The weekly average was up from 58.43 cents last week, but down from 61.75 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 59.07 cents Tuesday, September 29, to a low of 58.67 cents Wednesday, September 30. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended October 1 totaled 7,258 bales.

This compares to 4,910 bales reported last week and 6,214 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 39,413 bales compared to 59,160 bales the corresponding week a year ago. The ICE December settlement prices ended the week at 60.60 cents, compared to 60.31 cents last week.

Prices are in effect from October 2 – October 8, 2015

Adjustment World Price (AWP) – 44.32
ELS Competitiveness Payment – 0.00
Loan Deficiency Payment (LDP) – 7.68
Fine Count Adjustment 2014 Crop – 0.10
Coarse Count Adjustment (CCA) – 0.00
Fine Count Adjustment 2015 Crop – 0.05
Source: Farm Service Agency, FSA, USDA

USDA ANNOUNCES SPECIAL IMPORT QUOTA #8 FOR UPLAND COTTON October 1, 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 October 8, 2015, allowing importation of 15,287,174 kilograms (70,213 bales) of upland cotton.

Quota number 8 will be established as of October 8, 2015, and will apply to upland cotton purchased not later than January 5, 2015, and entered into the U.S. not later than April 4, 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 slow. Supplies and producer offerings were light. Demand was good. Average local spot prices were firm. Trading of CCC-loan equities was inactive.

A tropical weather system brought heavy, soaking rainfall to areas throughout the southeast as it tracked across the region during the period. The Gulf Coast experienced flash flooding from heavy downpours over the weekend. Storm drenched areas of coastal Alabama and the Florida panhandle received as much as seven inches of precipitation on a single day. Areas from south Georgia, the Carolinas, and Virginia recorded several inches of weekly accumulated rainfall as lingering thunderstorms drifted eastward.

The overcast, cool conditions and subsequent lack of heat units reduced plant vigor and delayed maturity in later-planted fields. Fieldwork and harvest activities were interrupted in areas that received excessive moisture as producers waited for waterlogged soils to dry. However, in other areas that received sparse precipitation or missed rainfall altogether, harvest activities were well underway in the earliest-planted fields.

Modules were accumulating on gin yards, but ginning activity was delayed at some locations due to the inclement weather preventing harvesting. A period of warm, sunny weather is needed to dry fields and allow harvest to gain momentum. Producers in the eastern Carolinas and Virginia were eyeing Hurricane Joaquin with concern as it tracked northward in the Atlantic. The storm has the potential to bring strong winds, heavy rainfall, and flooding over the weekend.

South Central Markets

North Delta

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

Warm, clear weather prevailed early week. The sunshine helped remove some standing water from fields flooded by recent rains. A cold front brought more moisture to the region late week. Up to one inch of rain was reported. A flood advisory remained in effect for all counties in Arkansas and Tennessee, which border the Mississippi River.

Daytime high temperatures were in the 50s to the low 70s. Overnight lows were in the 30s to 40s. According to the National Agricultural Statistics Service, soil moisture levels were mostly at surplus levels, which indicated standing water in low-lying fields. Producers hoped for an extended period of warm, clear weather so saturated soils could dry enough to support equipment.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was moderate. Average local spot prices were firm. Trading of CCC-loan equities was inactive. No forward contracting was reported.

Spring-like conditions prevailed most of the reporting period. A storm system brought more rain to the region late week. Daytime high temperatures were in the 70s to low 80s. Overnight lows were in the 40s to 50s. Up to one inch of precipitation was reported in Louisiana and Mississippi. A flood advisory remained in effect for all counties in Mississippi and Louisiana, which border the Mississippi River.

According to the National Agricultural Statistics Service, soil moisture levels were mostly at surplus levels, which indicated standing water in low-lying fields. Producers hoped for an extended period of dry weather so saturated soils could dry enough to support equipment.

Southwestern Markets

East Texas-Oklahoma

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

In southern Texas, ginning continued, but some gins have completed pressing operations. In eastern Texas, harvesting expanded and ginning continued. A few gins have not begun pressing operations. Harvesting and ginning continued in the Winter Garden and Upper Coastal counties. In Kansas, harvesting had begun on limited acres. Bolls were 39 percent opened and fields were 3 percent harvested, according to the National Agricultural Statistics Services (NASS) Crop Progress report. In Oklahoma, bolls were 48 percent opened according to NASS.

West Texas

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 active. Foreign mill inquiries were light.

Harvesting was limited and expected to expand next week. Industry reports indicated that early harvesting had commenced in San Angelo. Boll openers and defoliants were applied to prep fields for harvesting. Meetings were held.

Western Markets

Desert Southwest (DSW)

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

Temperatures were in the low 100s for Arizona. No rainfall was recorded in the period. Ginning reached the halfway mark in Yuma, Arizona. Bolls opening were at 80 percent completed in Arizona for the week ending September 27, according to the National Agricultural Statistics Service (NASS). Defoliation activities increased in central and eastern Arizona. Harvesting expanded in central Arizona. Limited ginning began late in the period.

Temperatures were in the mid-80s to mid-90s for New Mexico and El Paso, Texas. Limited defoliation began in both states. Some producers and industry experts were concerned about yields, as damage from cotton rust appeared to be widespread in areas where rainfall was abundant during the growing season. Bolls opening increased 17 percentage points from the previous week to 68 percent completed, ahead of the 5-year average of 59 percent, according to NASS.

San Joaquin Valley (SJV)

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

Mostly cloudy conditions were prevalent in the period. Light rainfall was received in Fresno, Madera, and Merced Counties. Temperatures began the period in the high 90s and dropped into the mid-to-high 80s mid-week. Defoliation activities continued. Harvesting began, but was not widespread. No ginning was reported.

American Pima (AP)

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.

Temperatures were in the low 100s in Arizona and the mid-to-high 80s in California. No moisture was recorded in the period for Arizona and the San Joaquin Valley (SJV).

No moisture was recorded in the period for Arizona. Light rainfall was received in Fresno, Madera, Merced Counties, and the San Joaquin Valley (SJV).Defoliation continued in central Arizona and the SJV. Limited ginning began on September 28 in the SJV. The first samples were delivered to the Visalia Classing Office during the period. Limited defoliation and harvesting began in the El Paso, Texas area. Ginning was not expected to begin until mid-October.

Textile Mill

Domestic mill buyers purchased a moderate volume of color 41, 42, and 51, leaf 4 and 5, and staple mostly 34 for first quarter 2016 delivery. No additional sales were reported. Demand for open-end and ring-spun yarn was moderate to good. Reports indicated denim production had slowed at some locations due to tapering demand. Most mills operated five to seven days. The undertone from mill buyers was cautious as they waited for new-crop cotton to enter the supply chain.

Inquiries through export channels were moderate. Representatives for mills in Thailand purchased a moderate volume of color 41, leaf 4, and staple 35 for January through March 2016 shipment. Agents throughout the Far East inquired for any discounted or low-grade styles. No sales were reported.

Regional Price Information