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USDA - AMS: Weekly Cotton Market Review, narrative (2019-01-11)

USDA U.S. Department of Agriculture - January 11, 2019

Mp_cn812 
January 11, 2019 
Weekly Cotton Market Review  
 

Spot quotations averaged 107 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, and 
uniformity 81.0-81.9) in the seven designated markets averaged 68.16 
cents per pound for the week ending Thursday, January 10, 2019.  The 
weekly average was up from 67.09 last week, but down from 76.84 cents 
reported the corresponding period a year ago. Daily average quotations 
ranged from a low of 67.24 cents Tuesday, January 8 to a high of 68.70 
cents Wednesday, January 9. Spot transactions reported in the Daily Spot 
Cotton Quotations for the week ended January 10 totaled 28,690 bales. 
This compares to 9,450 reported last week and 148,565 spot transactions 
reported the corresponding week a year ago. Total spot transactions for 
the season were 271,985 bales compared to 1,067,016 bales the corresponding 
week a year ago. The ICE March settlement prices ended the week at 72.85 
cents, compared to 70.83 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was inactive.  Supplies and producer offerings were moderate.  
Demand was moderate.  Average local spot prices were higher. Trading of CCC-loan 
equities was inactive. 
     
Scattered showers brought around one quarter of an inch to one inch of moisture 
to areas throughout Alabama, portions of the Florida Panhandle, and central 
Georgia early in the period.  Partly cloudy to sunny conditions prevailed the 
remainder of the week with daytime high temperatures in the 60s.  The dry and 
clear weather helped soft soils to firm and sunshine helped to dry rain soaked 
lint that remained on the stalk.  Fieldwork and harvesting resumed in areas 
where fields were accessible, but standing water remained in some low-lying areas.  
Ginning continued, but had slowed at some locations to allow backlogs of modules 
to accumulate on gin yards.  The Macon Classing Office reduced operations to 
two shifts daily. 
     
Similar conditions were observed across the upper Southeastern region as widespread 
shower activity brought around one-quarter to one-half of an inch of rainfall to 
areas throughout the Carolinas and portions of Virginia entering the period.  
Mostly sunny to fair conditions were observed the remainder of the period with 
daytime high temperatures in the upper 40s to upper 60s.  Fieldwork and harvesting 
resumed in some fields where soils were firm enough to support equipment.  
However, in many places fields remained unharvested due to soggy conditions; 
standing water also remained in some low-lying areas.  Producers were considering 
insurance options for fields that may be abandoned, due to damage from excessive 
moisture in recent months.  Many gins had completed pressing operations for the 
season.  A few gins remained on gin days as they waited for the last fields to 
be harvested and modules to arrive on gin yards.  The Florence Classing Office 
had a single shift operating daily. 
 
Textile Mill 

Domestic mill buyers inquired for a moderate volume of color 42 and better, 
leaf 5 and better, and staple 34 and longer for June through October delivery.  
Mill buyers also made initial inquiries for a moderate volume of 2019-crop cotton, 
color 41, leaf 4, and staple 34 for delivery January through December 2020.  
No sales reported.  The undertone from mill buyers was cautious; due to the lapse 
in federal government funding, all commodity loan activity has ceased as of 
January 3, 2019.  Subsequently, due to the government shutdown some merchants 
could not redeem cotton held as collateral by the USDA and some cotton shippers 
had to cancel deliveries of raw cotton to mills. 
     
Demand through export channels was light to moderate.  Representatives for mills 
throughout the Far East inquired for any discounted styles of cotton.   

Trading 
..No trading activity was reported.  


South  Central Markets Regional Summary  
 

North Delta 

Spot cotton trading was inactive. Supplies of available cotton were moderate.  
Demand was light.  Average local spot prices were higher.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported. Most merchants 
reported lackluster interest in business as producers remained on the sidelines 
due to uncertainty about trade agreements, disappointing harvest results, and 
fluctuating market conditions. The on-going shutdown of the Federal Government 
will soon begin to delay cotton shipments if producers are unable to redeem 
cotton from the CCC-loan to fulfill contracts; no new sales were reported. 

Seasonably cold weather prevailed during the period, compared with historical 
daytime average temperatures.  Highs reached into the low 60s; low temperatures 
were in the 30s and 40s.  Scattered rain showers brought less than one inch of 
rainfall to the region; however, heavy precipitation in the Midwest has raised 
the level of the Mississippi River and its tributaries to flood stage.  Flood 
warnings were issued for numerous counties throughout the region.  Low-lying 
roads and fields were flooded.  According to the U.S. Drought Monitor, soil 
moisture conditions were adequate-to-surplus throughout the region. A few gins 
in the region continued to operate.  Representatives of all of the sectors of 
the cotton industry made plans to attend upcoming regional and national industry 
meetings; the recent Beltwide meetings in New Orleans were well attended.
   
South Delta 

Spot cotton trading was inactive. Supplies of available cotton were moderate.  
Demand was light.  Average local spot prices were higher.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported. Most merchants 
reported lackluster interest in business as producers remained on the sidelines 
due to uncertainty about trade agreements, disappointing harvest results, and 
fluctuating market conditions. The on-going shutdown of the Federal Government 
will soon begin to delay cotton shipments if producers are unable to redeem 
cotton from the CCC-loan to fulfill contracts; no new sales were reported. 

Seasonable winter weather prevailed during the period.  Highs ranged from the 
50s to the 70s; low temperatures were in the 30s and 40s.  Scattered rain showers 
brought 2 inches of rainfall to the region; however, heavy precipitation in the 
Midwest, as well as regionally, has raised the level of the Mississippi River and 
its tributaries to flood stage. Flood warnings were issued for numerous counties 
throughout the region.  Low-lying roads and fields were flooded. According to the U.S.       
Drought Monitor, soil moisture conditions were adequate-to-surplus throughout the 
region.  A few gins in the region continued to operate.  Producers and other industry 
representatives attended the Beltwide meetings in New Orleans and made plans to 
attend regional and national meetings.  

Trading 
  
North Delta 
..
No trading activity was reported. 

South Delta 
..
No trading activity was reported. 


Southwestern Markets Regional Summary   


East Texas
 
Spot cotton trading was active. Supplies and producer offerings were heavy.  
Demand was moderate.  Average local spot prices were higher.  Producer interest 
in forward contracting was light.  Trading of CCC-loan equities was slow.  
Foreign inquiries were moderate.  Interest was best from Bangladesh, India, and Pakistan.  
     
In the Upper Coast, ginning neared the end.  Ginning continued in the Coastal Bend.  
In the Blackland Prairies, rainfall stalled harvesting and ginning activities. 
Thousands of acres remained unharvested. Fields were too wet to support equipment, 
so modules remained in the fields. Some gins were delayed because of a lack of 
modules on the gin yards. Producers were discouraged by excessively soggy conditions 
that delayed harvesting cotton and planting wheat.  In Kansas, harvesting was mostly 
completed, but ginning was estimated at around 15 percent done.  Not all of the gins 
had opened, mostly due to equipment repairs or updates.  In Oklahoma, ginning 
advanced and was estimated to be more than 50 percent completed.  A few fields 
that were too wet to harvest remained, but harvesting was more than 95 percent 
completed, according to local experts. Melting snow hindered transporting modules 
from the fields to the gin yards early in the reporting period.  Shipping and 
receiving bales continued at a steady pace. 
 
West Texas 

Spot cotton trading was active.  Supplies and producer offerings were heavy.  
Demand was moderate.  Average local spot prices were higher.  Producer interest 
in forward contracting was light.  Trading of CCC-loan equities was slow.  Foreign 
inquiries were moderate.  Interest was best from Bangladesh, India, and Pakistan.  
     
Daytime highs were in the low-50s to mid-60s and overnight lows were in the upper 20s 
to mid-30s.   The Lubbock territory was impacted by northern winds that helped dry 
fields in some areas.  Portions of the Rolling Plains remained soggy, which delayed 
fieldwork. Most modules were on the gin yards, but gins processed accumulated modules. 
Ginning schedules changed, with some moving to gin days and or weekends off.  Some gins 
had completed the season.  

Trading 
 
East Texas 
..
In Texas, a mixed lot containing a heavy volume of mostly color 62, 63, and 83, leaf 8 
and better, staple 35 and longer, mike 46-52, strength 22-29, uniformity 75-81, and 
75 percent extraneous matter sold for around 42.00 cents per pound, FOB warehouse 
(compression charges not paid). 
..
In Oklahoma, a light volume of mostly color 31, leaf 3, staple 37, mike 38-46, 
strength averaging 32.1, and uniformity averaging 81.6 sold for around 71.00 cents, 
FOB car/truck (compression charges not paid). 
..
A moderate volume of color 31 and 41, leaf 4 and better, staple mostly 36, mike 46-52, 
strength 28-31,  uniformity 80-81, and 25 percent extraneous matter sold for around 
68.50 cents, same terms as above.    
..
In Kansas, a moderate volume of mostly color 31, leaf 3, staple 36, mike 35-38, 
strength 28-29, and uniformity 79-80 sold for around 67.00 cents, same terms as above.  
..
A light volume of CCC-loan equities traded for 9.00 to 9.50 cents. 
 
West Texas 
..
A light volume of mostly color 21 and 31, leaf 2 and 3, staple 36 and longer, mike 34-42, 
strength 28-31, and uniformity 79-81 sold for around 69.00 cents per pound, FOB car/truck 
(compression charges not paid).   
..
A mixed lot containing a heavy volume of mostly color 42 and better, leaf 4 and better, 
staple 35 and 36, mike 36-47, strength 30-33, and uniformity 79-80 sold for around 
65.00 cents, same terms as above.   
..
A heavy volume of color 31, leaf 3 and better, staple mostly 38, 39, and 40, mike 26-37, 
strength 30-34, and uniformity 78-82 sold for around 60.50 cents, same terms as above.   
..
A light volume of mostly color 31 and 41, leaf 3 and better, staple 38 and longer, 
mike 37-49, strength 31-33, and uniformity 80-82 sold for around 60.00 cents, same terms as above.   
..
A light volume of CCC-loan equities traded for 8.75 to 10.50 cents. 


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.    
Producers continued to deliver previously contracted cotton to merchant and 
cooperative marketing pools.  Average local spot prices were higher.  
No forward contracting or domestic mill activity was reported.  Foreign mill 
inquiries were light.    
     
Arizona received rain early in the reporting period.  Approximately one-half 
inch of moisture was deposited.  Daytime temperatures returned to the low 70s 
by mid-week.  Rain is in the near term forecast.  Ginning continued uninterrupted.  
The Visalia Classing Office reported the Arizona season average predominate 
color 41 was at 39.0 percent, leaf 3 at 45.3 percent, mike averaging 4.61, 
staple averaging 37.35, and strength averaging 31.32 for week ending January 10. 
Daytime high temperatures were in the 50s for New Mexico and El Paso, TX.  
Showers produced one-tenth to one-quarter of an inch of moisture late in the period.  
Ginning continued.  The Visalia Classing Office reported the New Mexico and 
El Paso, TX season average predominate color 31 was at 54.3 percent, leaf 3 at 
44.2 percent, mike averaging 4.21, staple averaging 37.85, and strength 
averaging 30.44 for week ending January 10. The Visalia Classing Office 
continues to operate two shifts.   
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light.  
Producers delivered previously contracted cotton to merchant and 
cooperative marketing pools.  Average local spot prices were higher.  
No forward contracting or domestic mill activity was reported.   
     
A rainy weather pattern settled into California in the period.  
Precipitation totals measured from one-quarter of an inch in the south 
Valley to around three-quarters of an inch in the north Valley.   
Improvements in snow levels were noted in the Sierra Nevada Mountain range.  
The first manual snow survey was conducted on January 3 and there was several 
feet of snow blanketed on the ground, which is a definite improvement from 
January 2018, when only patches of snow were seen.  Early morning fog made 
an appearance late in the period.  Saw-ginning was completed in the SJV.  
Roller-ginning continued.  The Visalia Classing Office reported the season 
average of Upland saw-ginned color 21 and better was at 76 percent, leaf 2 
and better at 75.4 percent, mike averaging 4.41, staple averaging 37.51, and 
strength averaging 33.83 for week ending January 10.  Roller-ginned Upland 
season average was reported as color 21 and better at 50.7 percent, leaf 2 
and better at 51.4 percent, mike averaging 4.23, staple averaging 39.34, 
and strength averaging 36.02.  The Visalia Classing Office continues to 
operate two shifts.  Some industry members attended the Beltwide Cotton Conference.   
 
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.  Foreign mill inquiries were light.   Interest was best 
from Thailand and Turkey.   
     
Daytime high temperatures were in the 50s to 70s in the Far West.  Weather systems 
brought rainfall and snow to the region.  Precipitation amounts ranged from one-tenth 
to three-quarters of an inch, with more on the way.  Snowfall was abundant in higher 
elevations of Arizona, California, and New Mexico; which is beneficial for irrigation 
uses as well as drinking water.   Ginning continued.  Three AP gins were completed for 
the season in the San Joaquin Valley.   The Visalia Classing Office reported the season 
average AP color 2 and better at 94.2 percent, leaf 2 and better at 89.3, staple 
averaging 49.20, mike averaging 4.14, and strength averaging 43.99 for week ending 
January 10.  The Visalia Classing Office continues to operate two shifts. 
Some industry members attended the Beltwide Cotton Conference.   

Trading 
 
Desert Southwest 
..
No trading activity was reported. 
 
San Joaquin Valley 
..
No trading activity was reported. 

American Pima 
..
No trading activity was reported. 





 

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