Weekly Cotton Market Review – USDA

Spot quotations averaged 105 points lower 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, and uniformity 81.0-81.9) in the seven designated markets averaged 60.31 cents per pound for the week ending Thursday, November 21, 2019.

The weekly average was down from 61.36 last week and from 73.13 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 61.73 cents Friday, November 15 to a low of 59.12 cents Thursday, November 21.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 21 totaled 36,236 bales. This compares to 34,069 reported last week and 11,738 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 307,581 bales compared to 67,978 bales the corresponding week a year ago. The ICE March settlement price ended the week at 64.01 cents, compared to 66.08 cents last week.

Southeastern Markets Regional Summary

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

Cold and overcast conditions prevailed across portions of the lower Southeast early in the period as a low pressure system moved across the region. Widespread showers brought moderate precipitation to areas throughout Georgia and eastern Alabama. Rainfall totals measured from one-half of an inch to two inches of moisture. In Alabama and Georgia, the wet weather interrupted harvesting and fieldwork. Mostly clear and sunny conditions prevailed later in the week with daytime highs in the upper 60s to upper 70s.

The warm and dry conditions helped soft soils to firm and allowed field activities to resume. In low-lying fields, harvesting was hampered due to wet soils. Cotton stalks were mowed where field conditions allowed. Ginning continued uninterrupted as they continued to process backlogs of modules. In Georgia, some areas reported yields of 1,100 to 1,300 pounds per acre on irrigated acreage and yields of 500 to 1,000 pounds per acre on dryland acreage.

The Macon Classing Office continued around the clock classing operations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 18, harvesting advanced to 86 percent completed in Alabama and 79 percent completed in Georgia.

Wet and cold conditions were observed across the upper Southeastern region over the weekend as a low pressure system moved across the Carolinas and Virginia. Daytime high temperatures were in the upper 50s to low 60s. Widespread shower activity brought moderate moisture to areas throughout South Carolina, eastern North Carolina, and Virginia. Rainfall totals measured from one-half of an inch to two inches, with heavier accumulations observed in localized areas.

The wet weather interrupted harvesting and fieldwork activities in some areas. Field activities continued as dry conditions allowed during the period. Producers shredded stalks. Backlogs of modules accumulated on gin yards and ginning continued uninterrupted. The Florence Classing Office continued around the clock classing operations. According to NASS, harvesting advanced to 89 percent completed in Virginia, 86 in South Carolina, and 84 percent completed in North Carolina.

Textile Mill

Buyers for domestic mills purchased a moderate volume of color 31, leaf 4, and staple 36 for first quarter through third quarter 2020 delivery. Demand was good for color 41, leaf 4, and staple 34 and longer for first and second quarter delivery. No additional sales were reported. Demand for open-end and ring-spun yarn was moderate.

Demand through export channels was good. Agents for mills in India and Korea purchased a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 37 and longer for nearby shipment. Indonesian and Turkish mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 37 for nearby shipment. Demand was also good throughout the Far East for discounted or low-grade styles of cotton. No additional sales were reported.

Trading

• A light volume of color 31, leaf 3, staple 36-38, mike 37-49, strength 29-31, and uniformity 80-83 sold for around 325 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
• A moderate volume mixed lot containing color mostly 41, leaf mostly 3 and 4, staple 36-38, mike 43-49, strength 28-31, and uniformity 80-83 sold for around 100 points off ICE March futures, same terms as above.
• A moderate volume mixed lot containing color mostly 41 and 51, leaf 3 and 4, staple mostly 37 and 38, mike 43-49, strength 29-31, and uniformity 80-82 sold for around 63.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).
• A moderate volume of 41, 51, and 42, leaf 3 and 4, staple 34-36, mike 43-52, strength 31-35, and uniformity 81-82 sold for around 62.00 cents, same terms as above.

South Central Markets Regional Summary

North Delta

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

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Mostly clear skies prevailed during the reporting period. Rain clouds moved in late in the week. Less than 1 inch of rain was reported from light showers. Daytime temperatures were mostly in the 50s, warmed briefly to the 70s, but dropped to the 60s late week. Overnight lows were mostly in the 30s. Harvesting progressed slowly as producers waited for cotton remaining on the stalk to dry, and for soft soils to firm sufficiently to support equipment.

Fall field work was accomplished in drier areas. Ginning continued at a steady pace, although a few smaller gins had completed annual pressing operations. Some larger gins still had a considerable amount of cotton left to gin.According to the National Agricultural Statistics Service’s Crop Progress report released November 18, harvesting had reached 95 percent completed in Arkansas, 86 in Missouri, and 79 percent completed in Tennessee. A few producers reported yields of around 1,800 pounds per acre.

South Delta

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

Clear skies prevailed during the week. Daytime highs were mostly in the low 60s and 70s. Overnight lows were in the upper 20s early in the week as a winter storm moved out of the region. No rainfall was reported. Harvest was nearing completion in Louisiana, but continued to advance slowly in Mississippi as producers waited for cotton to dry and for soils to firm enough to support equipment.

Some fields were leveled and soil amendments were applied in anticipation of spring planting. A few gins wrapped-up annual operations, but for the most part, ginning continued at a steady pace. A few gins reported mechanical problems, which resulted in brief delays. According to the National Agricultural Statistics Service’s Crop Progress report released November 18, harvesting had reached 98 percent complete in Louisiana and 89 percent in Mississippi.

Reported yields of around 1,250 pounds per acre were common, with a few fields yielding close to 2,000 pounds. According to the U.S. Drought Monitor, a few pockets of abnormally dry conditions persisted in northeastern Louisiana; normal-to-surplus soil moisture conditions prevailed throughout the region.

Trading

North Delta

• No trading activity was reported.

South Delta

• A moderate volume of CCC-loan equities traded for 6.00 to 8.00 cents per pound.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was very good. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were heavy. Interest was best from Pakistan, Korea, and Vietnam.

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Harvesting was completed in the Blackland Prairies. Ginning continued uninterrupted, aside from mechanical repairs. Some gins completed pressing services during the reporting period. Ginning was expected to be completed by the end of December. Gins along the Upper Coastal counties varied in progress. A few gins were expected to finalize their season by the end of November. The season was completed in the Rio Grande Valley (RGV) and the final sample receipts had been graded. Beneficial rainfall was received in some parts of the RGV and south Texas.

Kansas cotton harvest was 44 percent completed, ahead of 24 percent last year, and ahead of 39 percent for the five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report, released on November 18. Harvesting made good progress, but was stalled when storms brought up to one-half of an inch of rainfall on November 21. Modules had begun to accumulate at the gin yards.

Oklahoma cotton harvest was 60 percent done, ahead of 54 percent last year, and ahead of 55 percent for the five-year average, according to NASS. Dryland fields were about 75 percent harvested and irrigated fields were nearly all harvested. Stalks were shredded and cover crops were drilled for next year.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Foreign inquiries were heavy. Interest was best from Pakistan, Korea, and Vietnam.

Spring-like temperatures dominated the weather pattern and harvesting continued. The Texas Panhandle was nearly harvested and the Rolling Plains made good progress. Daytime high temperatures were in the 60s to 70s, and overnight lows were in the 20s to 40s. Scattered showers delayed harvesting on November 20 and 21. Yields were reported at 30 to 50 percent less than what the industry had expected. Bolls were small, and contained fewer viable seeds in the locks, according to local reports. Ginning continued uninterrupted.

Trading

East Texas

• In Texas, a mixed lot containing a moderate volume of mostly color 31 and 41, leaf 3 and 4, staple 38-40, mike 43-49, strength 31-34, and uniformity 81-84 sold for around 63.00 cents per pound, FOB warehouse (compression charges not paid).
• A moderate volume of mostly color 31 and 41, leaf 3 and 4, staple 37 and longer, mike 44-47, strength 29-33, and uniformity 79-84 sold for around 60.00 cents, same terms as above.
• In Oklahoma, a heavy volume of mostly color 11 and 21, leaf 1 and 2, staple 38 and longer, mike 38-48, strength 29-34, and uniformity 79-84 sold for around 66.00 cents, FOB car/truck (compression charges not paid).
• A light volume of 2018-crop CCC-loan equities traded for 0.00 to 6.75 cents.
• A light volume of 2019-crop CCC-loan equities traded for 5.75 cents.

West Texas

• A light volume of mostly color 21, leaf 2, staple 36 and 37, mike 45-49, strength 28-32, and uniformity 79-83 sold for around 64.00 cents per pound, FOB car/truck (compression charges not paid).
• A mixed lot containing a heavy volume of mostly color 22 and better, leaf 4 and better, staple 33 and longer, mike 30-45, strength 26-32, and uniformity 77-82 sold for around 53.25 cents, same terms as above.
• A heavy volume of mostly color 22 and 32, leaf 2-4, staple 31-36, mike 40-49, strength 22-31, and uniformity 76-82 sold for around 51.50 cents, same terms as above.
• A light volume of 2018-crop CCC-loan equities traded for 1.25 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and demand were light. Most producers put 2019-crop cotton into the CCC-loan program or into merchant marketing pools. Some producers offered cotton in the period. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Temperatures remained in the mid-80s in central Arizona until a storm dropped temperatures intothe high 60s. Thunderstorm activity produced widespread scattered showers. The official station at Phoenix Sky Harbor International Airport recorded around one-third of an inch on November 19 and 20. Local reports indicated one and one-half inches up to two inches of moisture were received throughout the Phoenix metro area and in the Safford Valley. Flash flood warnings were in effect through the evening of November 20.

Prior to the rain, producers were harvesting into the night to beat the weather. Sources reported that harvested yields may be shy of the National Agricultural Statistic’s Service projected yield estimate for the state. Wet weather slowed harvesting throughout Arizona. Ginning in southeastern Arizona was slow.

Temperatures were mostly in the 60s for New Mexico and El Paso, TX. Heavy rainfall entered the area late in the period. Accumulated totals reached one-quarter of an inch, and shower activity remains active. Harvesting came to a halt. Ginning continued.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. Producers delivered 2019-crop cotton into the CCC-loan program or into merchant marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.

Cloudy conditions moved into the area late in the period, but no measurable rainfall was received in the Valley. Cloud cover dropped temperatures into the 60s. Fieldwork was active. Module movement was busy. Producers shredded stalks. Ginning continued uninterrupted.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2018-crop cotton were moderate. Supplies of 2019-crop cotton increased. Demand was light. Average local spot prices were steady. Producers delivered 2019-crop cotton into the CCC-loan program or into merchant marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light and mostly for prompt shipment. Interest was best from India and Vietnam.

Temperatures varied in the 60s to the 80s, as clouds and rain entered the Far West region late in the period. Arizona received one and one-half to two inches of moisture, with snowfall in higher elevations. Harvesting was delayed by wet weather. Second picking continued. Sources reported that harvested yields were marginal and will have difficulty reaching the National Agricultural Statistics Service’s projected yields. Ginning continued uninterrupted in the region.

Trading

Desert Southwest

• A light volume of color 11 and 21, mostly leaf 1, staple 35-37, mike 37-49, strength 29-33, and uniformity 79-80 sold for around 50 points off ICE December futures, uncompressed FOB warehouse.
• A moderate volume of color 11 and 21, leaf 2 and better, staple 33-35, mike 43-49, strength 27-30, and uniformity 78-80 sold for around 700 points off ICE December futures, same terms as above.

San Joaquin Valley

• No trading activity was reported.

American Pima

• No trading activity was reported.