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USDA - AMS: Weekly Cotton Market Review, narrative (2019-10-11)

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

   
Mp_cn812  
October 11, 2019 
Weekly Cotton Market Review 
 


Average spot quotations were 38 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 58.81 cents per pound for the week ending Thursday, October 10, 2019. 
The weekly average was up from 58.43 last week, but down from 73.25 cents reported 
the corresponding period a year ago. Daily average quotations ranged from a low of 
58.46 cents Tuesday, October 8 to a season high of 59.23 cents Wednesday, October 9. 
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended 
October 10 totaled 13,540 bales. This compares to 15,300 reported last week and 1,783 
spot transactions reported the corresponding week a year ago. Total spot transactions 
for the season were 130,033 bales compared to 22,572 bales the corresponding week a 
year ago. The ICE December settlement price ended the week at 61.42 cents, compared 
to 61.60 cents last week. 

 
Southeastern Markets Regional Summary 


Spot cotton trading was inactive.  Supplies were moderate. Producer offerings were 
light.  Demand was light.  Average local spot prices were steady. Trading of CCC-loan 
equities was inactive. 
     
Mostly clear to fair conditions were observed in areas from the Gulf Coast into 
central Georgia during the week.  A mix of clear to overcast conditions prevailed 
over north Alabama and localized showers brought moderate moisture to portions of 
the area over the weekend and early week.  Precipitation totals measured from one-half 
of an inch to three-quarters of an inch of moisture.  A cold front entered the region 
during the period and daytime high temperatures in the 90s cooled into the low to 
upper 80s during the week.  In areas of Alabama, the Florida Panhandle, and Georgia 
that missed moisture, moderate-to-extreme drought conditions expanded, according to 
the U.S. Drought Monitor.  In Georgia, the dry conditions negatively impacted dryland 
fields and local experts reported that bolls appeared to be withering on the top of 
the crop in some areas.  Defoliation was also hampered by lack of moisture in some 
fields.  In many areas producers would welcome a timely rainfall to invigorate 
late-planted fields and relieve heat stressed plants. Harvesting was uninterrupted 
and advanced at a rapid pace.  The Macon Classing Office added a second shift and 
planned to begin operating 24 hours the week of October 14.  According to the National 
Agricultural Statistics Service’s (NASS) Crop Progress report released October 7, 
harvesting advanced to 28 percent completed in Georgia and 25 percent completed in Alabama. 
     
Sunny and warm conditions across the Carolinas and Virginia gave way to cloudy weather 
and cooler temperatures in the mid-80s to upper 70s as a cold front entered the 
region over the weekend.  Very localized shower activity brought trace amounts to 
around one-half of an inch of precipitation to areas of the Pee Dee region and coastal 
Carolinas.  Despite the rainfall, most cotton growing areas have received little to no 
moisture in recent weeks. Areas of moderate-to-extreme drought conditions expanded in 
the Carolinas, and abnormally dry conditions developed in cotton growing areas of eastern 
Virginia, according to the U.S. Drought Monitor.  The dry conditions stressed plants, 
decreased plant vigor, and delayed maturity of bolls on the top of the crop.  Defoliation 
and harvesting expanded rapidly without interruption.  The Florence Classing Office 
added a second shift and planned to begin operating 24 hours over the weekend.  
According to NASS, cotton harvested had reached 25 percent in South Carolina, 18 in 
Virginia, and 16 percent in North Carolina. 
 
Textile Mill 

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 
for first and second quarter 2020.  No sales were reported.  Reports indicated most mills 
have covered their raw cotton needs through fourth quarter 2019.  Demand for open-end and 
ring-spun yarn was moderate, but had tapered.   
     
Demand through export channels was moderate.  Vietnamese mill buyers purchased a moderate  
volume of color 31, leaf 3, and staple 36 for November/December shipment. Indonesian mill 
buyers inquired for a moderate volume of color 31, leaf 3, and staple 36 and 37 for November 
shipment.  Pakistani mill buyers inquired for a moderate volume of color 41, leaf 4, and 
staple 36 for November through January 2020 shipment.  No additional sales were reported.   

Trading 
..
No trading activity was reported.  


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. 

A cold front brought heavy rain showers and cooler temperatures to the region early 
in the week.  Up to 3 inches of precipitation were reported.   Daytime highs dropped 
into the 70s before rebounding into the upper 80s.  Overnight lows were in the 50s.  
Low temperatures in the 40s were in the forecast for the week ahead.  Harvesting 
activities were delayed in many areas due to wet conditions; but fields dried sufficiently 
to allow harvesting to resume late in the week.  Producers were concerned about re-growth 
in fields that had been previously defoliated and unharvested before the rains arrived.  
Ginning proceeded without weather delays, but a few gins reported mechanical problems.  
According to the National Agricultural Statistics Service’s (NASS) Crop Progress report 
released October 7, harvesting had reached 41 percent completed in Arkansas, 7 in Missouri, 
and 22 percent in Tennessee. NASS continued to rate the crop condition mostly good-to-excellent 
in Arkansas and Tennessee, and fair-to-good in Missouri.  Producers reported that yields 
ranged from 1,100 to 1,800 pounds per acre. 

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.  

A cold front brought widespread rain showers and welcomed relief from hot temperatures 
early in the week.  Up to 3 inches of moisture were reported.   Daytime highs dropped 
into the 70s before returning to the upper 80s.  Overnight lows were in the 50s.  Low 
temperatures in the 40s and several days of rain were in the forecast.  Harvesting 
activities were delayed in most places due to wet conditions; but fields firmed sufficiently 
to support harvesting equipment late in the week.  Producers were concerned about 
re-growth in defoliated fields that remained unharvested due to the rain.  Ginning 
proceeded without weather delays, but some gins were slowed due to mechanical breakdowns.  
According to the National Agricultural Statistics Service’s (NASS) Crop Progress report 
released October 7, harvesting had reached 51 percent completed in Louisiana and 37 percent 
in Mississippi.  NASS rated the crop condition mostly fair-to-good in Louisiana and 
Mississippi.  Reported yields ranged from 1,300 to 1,700 pounds per acre. 

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 moderate.  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 active.  
Foreign inquiries were light.  Interest was best from Pakistan and Thailand.  
     
Less than optimal harvesting conditions continued in the Blackland Prairies (BP), 
and the Edwards Plateau as intermittent rainfall was received.  Lots of acres had 
received defoliant applications, and around 60 percent was harvested in the northern BP.  
Ginning could be finalized as soon as late November, according to local reports.  
Yields were discouraging and lower than expected.  Transporting modules from fields 
to gin yards resumed as soils firmed enough to support heavy equipment.  Not all of 
the gins were opened for the season in the BP.  Some gins in south Texas had finished 
pressing services, and other gins had 20-60 percent of ginning completed.  Ginning in 
the Upper Coast is expected to continue into January.  Modules were transported to 
the gin yards in the Coastal Bend.  Stalk destruction was ongoing.  In Kansas, bolls 
opening was 65 percent, behind 72 last year and ahead of the five-year average of 
59 percent, according to the National Agricultural Statistics Service’s (NASS) Crop 
Progress report released on October 7.  Several dry cold fronts moved in and daytime 
high temperatures varied in the high 50s to low 70s.  Overnight lows were in the mid-40s to     
mid-50s in southwestern Kansas.  In Oklahoma, bolls opening reached 77 percent, up 5 
from the previous year and up 2 percent from the five-year average, according to NASS.  
Harvesting was initiated and the Abilene Classing Office picked up the first sample 
receipts to be graded. 
 
West Texas 

Spot cotton trading was slow.  Supplies and producer offerings were light.  Demand was 
light.  Average local spot prices were firm.  Producer interest in forward contracting 
was light.  Trading of CCC-loan equities was moderate.  Foreign inquiries were light.  
Interest was best from Pakistan and Thailand. 
     
Daytime temperature highs were in the mid-60s to low 80s, and nighttime lows were in 
the upper 40s to low 60s.  Sunny, windy conditions dried soggy fields from last week’s 
rainstorms and fieldwork resumed.  A series of cold fronts brought cooler conditions.  
A possible frost or freeze is in the nearby forecast. Re-growth was a concern and could 
require a second or third application of defoliants.  Local reports indicated that lots 
of acres were ready to be harvested.  Ginning activity increased as more gins began to 
offer pressing services.  Warehouses received cotton bales.  Regional field days and meetings were held.  
      
Trading 
 
East Texas 
..
In Texas, a mixed lot containing a moderate volume of mostly color 31 and better, 
leaf 3 and better, staple 37 and longer, mike 37-52, strength 25-33, and uniformity 
77-83 sold for around 61.00 cents per pound, FOB warehouse (compression charges not paid). 
..
A light volume of mostly color 11 and 21, leaf 2 and 3, staple 35 and longer, mike 43-52, 
strength 26-33, and uniformity 79-84 sold for around 59.25 cents, same terms as above.  
..
A mixed lot containing a heavy volume of mostly color 41 and better, leaf 2-4, staple 35-39, 
mike 42-53, strength 26-32, and uniformity 79-84 sold for around 57.25 cents, same terms as above.  
..
A heavy volume of CCC-loan equities traded for -1.01 to 3.69 cents. 

West Texas 
..
A light volume of new-crop cotton, mostly color 12 and 22, leaf 1, staple 30 and 31, 
mike averaging 40.9, strength averaging 24.5, and uniformity averaging 78.8 sold for 
around 47.50 cents, same terms as above.  
..
A moderate volume of CCC-loan equities traded for -0.02 to 0.66 cents. 


Western Markets Regional Summary  


Desert Southwest (DSW)
 
Spot cotton trading was inactive.  Supplies and demand were light.    
Average local spot prices were higher.  No forward contracting or domestic 
mill activity was reported.  CCC-loan equity trading was slow.  Merchants 
indicated with ICE futures prices so low; offerings were at a physical 
price level.  Foreign mill inquiries were light.     
     
Temperatures were in the mid-to-high 90s in Arizona. Defoliation activities 
progressed in central Arizona.  Harvesting continued in Yuma.  Yields averaged 
two and one-half bales to two and three-quarter bales per acre.  Ginning neared 
the halfway mark in Yuma.  Temperatures continued to be mild in New Mexico and El Paso, TX.  
Bolls were cracking open.  The crop made good progress 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 higher.  No forward contracting or domestic 
mill activity was reported.   Merchants indicated with ICE futures prices 
so low; offerings were at a physical price level.  Foreign mill inquiries were light.      
     
Unseasonably warm temperatures gave way to a cool down late in the period.  
Temperatures were in the high 70s.  Harvesting had begun in Kern and Tulare 
Counties.  A couple of gins began pressing operations early in the reporting period.     
 Producers debated whether to saw or roller gin save seed program cotton.   
 
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.  
Most mills remained on the sidelines.  Shippers continued to offer 2018-crop cotton.  
Shipper prices remained firm.      
     
Temperatures were mostly in the 90s in the Far West for most of the week. 
Defoliation activities commenced in the San Joaquin Valley of California.  No ginning was reported.     

Trading 
 
Desert Southwest 
..
A light volume of CCC-loan equities traded for 50 points per pound.   

San Joaquin Valley 
..
No trading activity was reported. 

American Pima 
..
No trading activity was reported. 




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