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USDA - AMS: Weekly Cotton Market Review, narrative (2019-09-27)

USDA U.S. Department of Agriculture - September 27, 2019

   
Mp_cn812 
September 27, 2019 
Weekly Cotton Market Review  
 


Average spot quotations were 17 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 57.94 cents per pound for the week ending Thursday, September 26, 2019. 
The weekly average was down from 58.11 last week and from 74.96 cents reported the 
corresponding period a year ago. Daily average quotations ranged from a high of 
58.34 cents Monday, September 23 to a low of 57.71 cents Thursday, September 26. 
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended 
September 26 totaled 9,447 bales. This compares to 27,518 reported last week and 
2,136 spot transactions reported the corresponding week a year ago. Total spot 
transactions for the season were 101,193 bales compared to 17,279 bales the 
corresponding week a year ago. The ICE December settlement price ended the week 
at 60.28 cents, compared to 60.33 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was moderate.  Supplies and producer offerings  were light.  
Demand was light.  Average local spot prices were steady. Trading of CCC-loan 
equities was inactive. 
     
Sunny to partly cloudy conditions prevailed over the lower Southeastern region 
during the period.  Daytime high temperatures varied from the upper 80s to upper 90s.  
Localized afternoon shower activity brought trace amounts of precipitation to 
some areas, but mostly dry conditions were observed across the entire region 
throughout the week.  The crop progressed at a rapid pace and boll opening advanced.  
The lack of moisture in recent weeks stressed dryland fields.  Local experts reported 
that the droughty conditions had negatively impacted irrigated fields in some areas.  
Moderate-to-severe drought conditions expanded in areas from north Alabama to the 
Florida Panhandle and into central Georgia, according to the U.S. Drought Monitor.  
Producers would welcome a period of timely rainfall to invigorate late-planted 
fields and enhance boll development on the top of plants.  Defoliation and harvesting 
advanced at a rapid pace in Georgia and was expanding in Alabama.  Modules were 
accumulating on gin yards and ginning was getting underway.  According to the 
National Agricultural Statistics Service’s (NASS) Crop Progress report released 
September 23, cotton bolls opening advanced to 81 percent in Alabama and Georgia. 
     
Sunny conditions prevailed across the upper Southeastern region during the period 
with daytime high temperatures in the upper 80s to low 90s.  Dry conditions dominated 
the weather pattern throughout the week.  Moderate-to-severe drought conditions 
expanded in the Carolinas, according to the U.S. Drought monitor.  The lack of moisture 
stressed plants and producers maintained full watering schedules on irrigated acreage; 
drought stressed plants in dryland fields were shutting down.  The crop matured at 
a rapid pace and bolls were cracking open.  Producers applied defoliants and harvesting 
was getting underway in the Carolinas.  Modules were arriving on gin yards and several 
gins had begun pressing operations.  Samples were arriving at the Florence Classing 
Office and the classing season was getting underway.  According to NASS, cotton bolls 
opening had reached 83 percent in South Carolina, 76 in North Carolina, and 74 percent in Virginia.  
 
Textile Mill 

Inquiries from domestic mill buyers were light.  Demand for color 41, leaf 4, and 
staple 34 for fourth quarter 2019 and first quarter 2020 was light.  No sales were 
reported.  Most mills have covered their raw cotton needs through fourth quarter 2019.  
Demand for open-end and ring-spun yarn was moderate.   
     
Demand through export channels was moderate.  Agents throughout the Far East inquired 
for any discounted styles of cotton.  No sales were reported.      

Trading 
..
A light volume of 2018-crop cotton, color 31 and 41, leaf 3 and 4, staple 37 and 38, 
mike 43-49, strength   29-32, and uniformity   80-83 sold for around 300 points on 
ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). 
..
Similar lots containing up to 40 percent extraneous matter sold for around 225 
to 250 points on ICE December futures, same terms as above. 
..
A light volume of color 41, leaf 3 and 4, staple 37 and 38, mike 43-49, strength 29-32, 
and uniformity 80-83 sold for around 275 points on ICE December futures, same terms as above.  


South Central Markets Regional Summary


North Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light.  
Average local spot prices were steady.  Trading of CCC-loan equities was inactive.  
No forward contracting was reported.  Merchants purchased a moderate volume of cotton forfeited to the CCC-loan. 

Clear to partly cloudy skies prevailed during the week.  Light and scattered showers 
brought about   one-quarter of an inch of precipitation to the Memphis territory, 
which provided some relief from the scorching temperatures.  Daytime highs were in 
the 80s and overnight lows were in the 70s.  Unseasonably high temperatures were in 
the forecast for the week ahead.  Harvesting activities advanced under near-ideal 
conditions, and covered the spectrum from defoliation to stalk shredding.  The Dumas and 
Memphis Classing Offices commenced annual grading operations.  According to the National 
Agricultural Statistics Service’s (NASS) Crop Progress report released September 23, 
bolls opening advanced to 91 percent in Arkansas, 58 in Missouri, and 69 percent in Tennessee.  
Harvesting had reached 4 percent complete in Arkansas. NASS continued to rate the crop 
condition mostly good-to-excellent in Arkansas and Tennessee, and fair-to-good in Missouri.   
 
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light.  
Average local spot prices were steady.  Trading of CCC-loan equities was inactive. 
No forward contracting was reported as cotton prices remained low.  

Very hot daytime temperatures prevailed during the week.  Daytime highs were in the 90s.  
Early morning lows were in the low 70s.  No rainfall was reported. The hot, dry weather
 conditions were ideal for field activities. Producers were hoping for rain showers and cooler 
temperatures, but very few rain chances existed in the forecast for the week ahead. Defoliation 
expanded over a widespread area.  Harvesting gained momentum in Louisiana and Mississippi. 
Several gins in Mississippi commenced annual pressing operations.  According to the National 
Agricultural Statistics Service’s (NASS) Crop Progress report released September 23, bolls 
opening reached 90 percent in Louisiana and 77 percent in Mississippi.  Both figures lagged 
slightly behind the five-year average.  Harvesting had reached 19 percent complete in Louisiana 
and 7 percent in Mississippi.  NASS rated the crop condition mostly fair-to-good in Louisiana 
and Mississippi.  Yields of up to 1,800 pounds per acre were reported in Louisiana. 

Trading 
  
North Delta 
..
A moderate volume of 2018-crop, CCC-Catalog cotton, color 42, leaf 3, staple 36 and 37, 
mike averaging 45.0, strength averaging 30.1, and uniformity averaging 81.9 sold for 
around 53.36 cents per pound, FOB warehouse (compression charges not paid). 
..
A moderate volume of 2018-crop, CCC-Catalog cotton, color 51 and better, leaf 4 and better, 
staple 37 and longer, mike averaging 46.0, strength 28-33, and uniformity averaging 
81.1 sold for around 51.85 cents, same terms as above. 
..
A moderate volume of 2018-crop, CCC-Catalog cotton, color 42, leaf 4 and better, staple 36 
and longer, mike averaging 51.0, strength 29-34, and uniformity 79-84 sold for around 48.30 cents, same terms as above. 
 
South Delta 
..
No trading activity was reported.  


Southwestern Markets Regional Summary


East Texas 

Spot cotton trading was moderate.  Supplies and producer offerings were heavy.  
Demand was moderate.  Average local spot prices were steady.  Producer interest 
in forward contracting was light.  Trading of CCC-loan equities was slow.  
Trading of CCC-forfeiture catalog cotton was active.  Foreign inquiries were light. 
     
In the Upper Coast and southern Texas, harvesting neared completion.  Modules were 
transported to gin yards as the fields had begun to dry.  Flood waters receded, 
and warehouses shipped and received bales.  In the Blackland Prairies, harvesting 
expanded and modules were lined up in the fields.  Some gins had begun to work two 
shifts.  Route drivers delivered grading samples to the Corpus Christi and Rayville 
Classing Offices for classification services. In Kansas, cotton was rated mostly 
fair-to-good.  Setting bolls was 96 percent, near 100 last year and 95 percent 
for the five-year average.  Bolls opening was at 27 percent, lagging behind 50 
last year and 37 percent for the   five-year average, according to the National 
Agricultural Statistics Service’s (NASS) Crop Progress report released on September 23.  
Equipment preparations were underway at the gins.  In Oklahoma, cotton rated mostly 
fair-to-good.  Bolls opening was 53 percent compared to 47 last week and 53 for the 
five-year average, according to NASS.  Producers were encouraged with progress and were eager to begin harvesting.   
 
West Texas 

Spot cotton trading was slow for the 2018 crop.  Supplies and producer offerings 
were light.  Demand was light.  Average local spot prices were steady.  Producer 
interest in forward contracting was light.  Trading of CCC-loan equities was inactive.  
Trading of CCC-forfeiture catalog cotton was active. Foreign inquiries were light.   
     
Daytime high temperatures were in the mid-70s to low 90s and overnight lows were in the 60s.  
Heavy thunderstorms during the period brought up to three and one-half inches of precipitation.  
Some locations have received more than 6 inches of rainfall for the month of September.  
The rain is too late to benefit most stands since much of the dryland was done.  
Bolls opening advanced and some producers applied defoliation before the thunderstorm.  
Harvesting and ginning had begun.   The first samples were submitted to the Lubbock Classing 
Office.  Some fields were submitted to insurance and will not be harvested.            
 
Trading 
 
East Texas 
..
In Texas, a moderate volume of new-crop mostly color 11 and 21, leaf 2 and 3, staple 37, 
mike 42-45, strength 29-31, and uniformity 80-81 sold for around 60.00 cents per pound, 
FOB warehouse (compression charges not paid). 
..
A moderate volume of mostly color 31 and 41, leaf 2 and 3, staple 33 and longer, mike 
averaging 50.1, strength 26-30, and uniformity 78-82 sold for around 51.00 cents, same terms as above.  
..
In Kansas, a mixed lot of 2018-crop cotton containing a moderate volume of mostly color 
42 and 43, leaf 4-8, staple 35 and 36, mike 25-45, strength 25-29, uniformity 77-83, 
and 50 percent extraneous matter sold for around 44.50 cents, FOB car/truck (compression charges not paid).  
..
A light volume of 2018-crop, CCC-Catalog cotton, mostly color 44, leaf 2-4, staple 35 and 
longer, mike 43-49, strength 26-29, and uniformity 79-81 sold for around 40.03 cents, 
FOB warehouse (compression charges not paid). 
..
A heavy volume of 2018-crop, CCC-Catalog cotton, color 53 and better, leaf 4 and better, 
staple 33 and longer, mike 39-47, strength 26-33, uniformity 77-81, and 100 percent extraneous 
matter (Plastic) sold for around 20.62 cents, same terms as above 
..
A heavy volume of CCC-loan equities traded for -2.50 to -5.00 cents. 

West Texas 
..
A light volume of 2018-crop cotton color 42, leaf 2 and 3, staple 33, mike 50-51,  
strength averaging 30.1, uniformity averaging 80.9, and 100 percent extraneous matter 
sold for around 50.00 cents per pound, FOB car/truck (compression charges not paid).   
..
A light volume of 2018-crop, CCC-Catalog cotton, color 31 and better, leaf 2 and 3, 
staple 37, mike averaging 36.0, strength averaging 30.0, and uniformity averaging 81.3 
sold for around 58.16 cents, FOB warehouse (compression charges not paid). 


Western Markets Regional Summary 
 

Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies and demand were light. Average local 
spot prices were steady.  No forward contracting or domestic mill activity was 
reported.  Trading of CCC-forfeiture catalog cotton was active.  Foreign mill 
inquiries were light.     
     
Temperatures were in the high 90s for most of the week.   Thunderstorms produced 
heavy showers and flash-flooding was reported in washes east of Phoenix.  
Precipitation amounts varied depending on locale.  Officially, around one-quarter 
of an inch was recorded at Sky Harbor Airport, but as much as one and one-half of 
an inch was received in some locations.  Central Arizona remained under a flash 
flood watch through Thursday evening.  No damage was reported to cotton fields, 
but defoliation slowed to allow time for fields to dry.  Ginning was expected to 
begin the week of October 7.  Local Safford Valley sources reported defoliation 
was set to begin in 7 to 10 days. Ginning continued in Yuma, AZ.  Temperatures 
continued to be mild in New Mexico and El Paso, TX.  Bolls were cracking open.  
The crop progressed to cut-out stage.  Producers prepared equipment for harvest.   
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light.    Average 
local spot prices were steady.  No forward contracting or domestic mill activity 
was reported.   Foreign mill inquiries were light.   
     
Temperatures were mostly in the high 80s to high 90s. The crop reached cut-out stage. 
Initial defoliation began in the period.  Sources reported limited harvesting had 
begun in Tulare County.  Ginning was expected to begin the week of October 7, and 
after electrical meters were off the summer rates. Gins continued to make final 
repairs.  Producers prepared equipment for harvest.  Producers attended annual gin meetings.      
 
American Pima (AP) 

Spot cotton trading was inactive.  Supplies of 2018-crop cotton 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.  A light volume of new-crop 
sales was reported.  Interest was best from Bangladesh, China, India, and Thailand.  
According to the Foreign Agricultural Service, US Export Sales report 184,600 bales of 
Pima cotton were committed for export for the week ending September 19.  This compares 
to 274,700 bales the previous year.  No sales for the 2020 marketing year were reported.  
     
Temperatures were in the 80s and 90s for the far west.  The crop reached cut-out.   
Initial defoliation began in Arizona and California.  The crop in the San Joaquin Valley 
(SJV) of California needed more time to fully mature.  Some producers will wait to 
harvest until all bolls at the top of plants open.  Producers, who normally would second 
pick the crop are reconsidering, due to weak demand and low prices.  Ginning in the SJV 
will begin around mid-October.   

Trading 
 
Desert Southwest 
..
A light volume of 2018-crop, CCC-Catalog cotton, color 31, leaf 3, staple 36, 
mike averaging 42.0, strength averaging 27.0, and uniformity averaging 80.5 sold 
for around 52.15 cents per pound, FOB warehouse (compression charges not paid). 
..
A light volume of 2018-crop, CCC-Catalog cotton, color 31, leaf 3, staple 36, mike 41-45, 
strength averaging 27.0, and uniformity averaging 81.5 sold for around 51.15 cents, same terms as above. 
.. 
A light volume of 2018-crop, CCC-Catalog cotton, color 32, mostly leaf 3, staple 35 and 36, 
mike 41-45, strength averaging 27.0, and uniformity averaging 81.5 sold for around 50.55 cents, same terms as above. 
..
A light volume of 2018-crop, CCC-Catalog cotton, color 41, mostly leaf 3 and 4, staple 36, 
mike averaging 41.0, strength averaging 27.0, and uniformity averaging 81.0 sold for around 49.15 cents, same terms as above.   

San Joaquin Valley 
..
No trading activity was reported. 

American Pima 
..
No trading activity was reported. 



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