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USDA - AMS: Weekly Cotton Market Review, narrative (2019-01-25)

USDA U.S. Department of Agriculture - January 25, 2019

   

Mp_cn812  
January 25, 2019 
Weekly Cotton Market Review  
 


Spot quotations averaged 40 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 69.17 cents per pound 
for the week ending Thursday, January 24, 2019. The weekly average was up from 68.77 last 
week, but down from 79.66 cents reported the corresponding period a year ago. Daily average 
quotations ranged from a high of 69.64 cents Friday, January 18 to a low of 68.88 cents 
Tuesday, January 22. Spot transactions reported in the Daily Spot Cotton Quotations for 
the week ended January 24 totaled 44,962 bales. This compares to 54,137 reported last week 
and 97,479 spot transactions reported the corresponding week a year ago. Total spot transactions 
for the season were 371,084 bales compared to 1,260,255 bales the corresponding week a year 
ago. The ICE March settlement prices ended the week at 73.14 cents, compared to 74.37 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was slow.  Supplies and producer offerings were moderate. Demand was 
moderate.  Average local spot prices were steady. Trading of CCC-loan equities was inactive. 
     
Mostly cloudy to fair conditions prevailed across Alabama, the Florida Panhandle, and Georgia 
during the period.  Daytime high temperatures varied from the mid-30s to mid-60s with overnight 
lows dipping into the 20s.  Scattered shower activity brought moderate rainfall to portions of 
central and north Alabama and Georgia over the weekend.  Precipitation totals measured from 
one-quarter of an inch to one-half of an inch of moisture.  Widespread storms returned late 
week and brought an additional  1 to 2 inches of rainfall to the lower Southeastern. 
Field activities were limited; fieldwork advanced where soils were firm enough to support equipment.  
Ginning continued; a few gins had finished operations for the season and others had gone to 
gin days to allow modules to accumulate on gin yards.  The Macon Classing Office maintained 
two shifts to accommodate the steady flow of samples that continued to arrive.  Producers, 
ginners, and industry members made plans to attend the Georgia Cotton Commission’s 12th Annual 
meeting in Tifton, GA on January 30. 
 
In the upper Southeastern region, cloudy conditions and unseasonably warm daytime temperatures 
over the weekend gave way to clear and cold conditions entering the week as sunny weather prevailed 
and daytime highs dipped into the low 30s.  Warmer conditions returned later in the week as daytime 
highs returned to the 60s and overcast conditions prevailed.  Light, spotty shower activity brought 
around one-quarter of an inch to one-half of an inch of moisture to portions of the Carolinas and 
Virginia during the period.   Heavier accumulations approaching 1 inch of rainfall was observed 
in areas of eastern South Carolina.  Field activities were limited. Ginning neared completion; 
some gins remained on gins days as they waited for the last modules to arrive on gin yards. 
The Florence Classing Office had a single shift operating every other day.   
 
Textile Mill 

Domestic mill buyers purchased a light volume of color 41, leaf 4, and staple 34 for prompt 
fill-in needs.  Mill buyers also purchased a moderate volume of color 51 and better, leaf 5 
and better, and staple 32 and longer for June through October delivery.  Mill buyers made 
initial inquiries for 2020-crop cotton; no sales were reported.   
     
Demand through export channels was moderate and had improved due to lower ICE futures prices.  
Agents for mills in Bangladesh purchased a moderate volume of color 31, leaf 3, and staple 36 
for nearby shipment. Representatives for mills in India purchased a moderate volume of color 
41, leaf 4, and staple 36 for nearby shipment.  Turkish mill buyers purchased a moderate volume 
of heavily discounted low-mike cotton for nearby shipment. 

Trading 
..
A moderate volume mixed lot containing color mostly 41 and 52, leaf mostly 3 and 4, staple 37 
and 38, mike 43-49, strength 27-30, uniformity 79-82, and containing approximately 50 percent extraneous matter 
sold for around 61.00 cents per pound, FOB car/truck (Rule 5, compression charges paid). 

 
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 firm.  Trading of  CCC-loan equities was inactive. No forward 
contracting was reported; no new sales were reported. In spite of the on-going partial shutdown 
of the Federal Government, Secretary of Agriculture Sonny Perdue announced that, effective 
January 24, all Farm Service Agency offices would open, in part to enable producers to redeem 
cotton from the CCC-loan. 
     
Winter weather prevailed during the period, characterized by fluctuating temperatures and mixed 
precipitation.  Daytime high temperatures in the 50s early in the week dropped into the 30s as 
a winter storm front moved through the region.  Overnight lows were in the 20s.  A second front 
late week brought heavy rainfall, mixed with snow flurries in northern areas throughout the 
Memphis territory.  Accumulated moisture of up to 3 inches was reported in most places; 4 inches 
were reported in isolated spots.  Several gins continued pressing operations in both the Memphis 
and the Dumas territories.  A few small gins ceased operations and transferred their remaining 
modules to a larger operation, for economic reasons.  The Dumas Classing Office was classing 
cotton based gin day receipts.  The Memphis Classing Office maintained one shift.  Producers and 
other interested persons made plans to attend industry-related workshops and meetings, including 
the Mid-South Farm and Gin Show scheduled for March 1-2 in Memphis, TN. 

South Delta 

Spot cotton trading was inactive.  Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were firm.  Trading of  CCC-loan equities was inactive. No forward 
contracting was reported; no new sales were reported. In spite of the on-going partial shutdown 
of the Federal Government, Secretary of Agriculture Sonny Perdue announced that, effective 
January 24, all Farm Service Agency offices would open, in part to enable producers to redeem 
cotton from the CCC-loan. 
     
Typical winter conditions, characterized by fluctuating temperatures and scattered rain showers, 
dominated the weather pattern. Daytime high temperatures in the 60s dropped briefly into the 40s 
as the edge of a northern winter storm front brushed by the region.  Overnight lows were in the 
30s.  A second storm late week brought heavier amounts to localized places.  Accumulated moisture 
of up to 2 inches was reported in most places; nearly 3 inches were reported in a few places.  
No field activities were reported, mainly due to inclement weather and soft soils. The Rayville 
Classing Office ceased operations after the few remaining gins transferred their remaining modules 
to a larger ginning operation in the Memphis territory, for economic reasons.  Producers and 
other interested persons made plans to attend industry-related workshops and meetings, 
including the Mid-South Farm and Gin Show scheduled for March 1-2 in Memphis, TN.   

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 inactive. Foreign inquiries were moderate.  Interest was best 
from Indonesia, Pakistan, and Taiwan. 
     
Fieldwork was active in the Rio Grande Valley as producers prepared for the upcoming planting season.  
Ginning continued in the Winter Garden and Blackland Prairies (BP).  Rainfall was received that 
further slowed end of season activities.  Cooler conditions prevailed in the BP with daytime highs 
in the upper 40s to low 60s, and overnight lows in the low 20s to low 40s.  Pre-plant meetings 
were held to update producers with new technologies.  Sample   receipts from Kansas gins increased 
at the Abilene Classing Office.  Daytime temperature highs were in the upper 20s to upper 40s and 
overnight lows were below freezing.  Humid conditions kept some fields too soggy to support 
equipment. Ginning continued at capacity in Oklahoma.  Ginning was expected to go into March.  
 
West Texas 

Spot cotton trading was active.  Supplies and producer offerings were heavy.  Demand was good.  
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 Indonesia, Pakistan, and Taiwan.  
     
Daytime highs were in the low 40s to mid-70s and overnight lows were in the teens to upper 30s. 
Some ginning operations in the Low Rolling Plains were  approximately three weeks away from 
completion.  Some gins were caught up to the modules on the yards, and were temporarily interrupted 
until more modules accumulated.  Sampling receipts decreased and the Lamesa and Lubbock Classing Offices        
reduced shift work to keep pace with incoming samples.   

Trading 
 
East Texas 
..
In Texas, a mixed lot containing a heavy volume of mostly color 53 and better, leaf 6 and better, 
staple 33, 34, and 35, mike 38-48, strength 24-28, and uniformity 76-80 sold for around 54.50 cents 
per pound, FOB warehouse (compression charges not paid). 
..
In Oklahoma, a light volume of mostly color 21 and 31, leaf 4 and better, staple 37 and 38, mike 38-44, 
strength 27-32, and uniformity 80-82 sold for around 72.50 cents, FOB car/truck (compression charges not paid). 
..
In Kansas, a light volume of mostly color 31 and 41, leaf 4, staple 36, mike averaging 44.8, strength       
averaging 29.5, and uniformity averaging 81.9 sold for around 69.00 cents, same terms as above.  

West Texas 
..
A moderate volume of mostly color 22 and 32, leaf 3 and better, staple 34, 35, and 36, mike 32-44, 
strength 28-30, and uniformity 78-82 sold for around 65.25 cents per pound, FOB car/truck (compression charges not paid).   
..
A mixed lot containing a heavy volume of mostly color 31 and 41, leaf 3, 4, and 5, staple 37 and longer, 
mike 32-47, strength 27-33, uniformity 78-81, and 75 percent extraneous matter sold for around 65.00 cents, 
same terms as above.   
..
A light volume of color 41 and 51, leaf mostly 6 and 7, staple 36 and 37, mike 34-39, strength 28-31,      
uniformity 79-80, and 75 percent extraneous matter sold for around 58.00 cents, same terms as above.   
..
A light volume of CCC-loan equities traded for 6.25 to 10.50 cents. 


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was active.  Supplies and demand were moderate. 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.   Interest was best for color 31 and better, leaf 3 and 
better, and staple 36 and longer.   
     
Daytime high temperatures were in the high 60s to low 70s for central Arizona.  Nighttime lows 
were mostly in the low 40s.  No rainfall was recorded in the period. Ginning continued. 
Daytime high temperatures were in the 60s for New Mexico and El Paso, TX.  Nighttime lows 
were in the low 30s.  Ginning neared completion in New Mexico.     
 
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.  
Foreign mill inquiries were light.    
     
Sunny skies, but chilly conditions were in the area for most of the week. Daytime temperatures 
were in the 50s.  Nighttime lows were in the 30s and 40s.  Rainfall was received early 
in the reporting period.  Precipitation amounts neared one-half of an inch. Roller-ginning continued.   
 
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.    
     
Daytime high temperatures were in the 50s to 70s in the Far West.  No rain was recorded for 
Arizona, New Mexico, and El Paso, TX.  The San Joaquin Valley of California received one-half 
of an inch early in the reporting period.  Ginning continued.   

Trading 
 
Desert Southwest 
..
In Arizona,  a moderate volume of mostly color 31, leaf 3 and better, staple 37 and longer 
sold for around 200 points on ICE March futures, uncompressed, FOB warehouse.  
..
A moderate volume of color 41 and 51, leaf mostly 3, staple 35 and longer, with 50 percent 
high mike sold for around 63.00 cents per pound, same terms as above.   
..
In New Mexico, a light volume of color 41, leaf 4, and staple mostly 37 sold for around 
66.50 cents, FOB car/trucks (compression charges not paid).    

San Joaquin Valley 
..
No trading activity was reported. 

American Pima 
..
No trading activity was reported. 


USDA ANNOUNCES SPECIAL IMPORT QUOTA #14 
FOR UPLAND COTTON 
January 24, 2019 


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 January 31, 2019, allowing importation of 
12,334,220 kilograms (56,650 bales) of upland cotton.  
     
Quota number 14 will be established as of January 31, 2019, and will apply to upland cotton 
purchased not later than April 30, 2019, and entered into the U.S. not later than July 29, 2019. 
The quota is equivalent to one week's consumption of cotton by domestic mills at the 
seasonally-adjusted average rate for the period July 2018 through September 2018, 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.  




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