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USDA - AMS: Weekly Cotton Market Review, narrative (2020-03-13)

USDA U.S. Department of Agriculture - March 13, 2020

   

Mp_cn812  
March 13, 2020 
Weekly Cotton Market Review 
 
 


Spot quotations averaged 138 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 56.15 
cents per pound for the week ending Thursday, March 12, 2020. The weekly average was 
down from 57.53 last week and 68.75 cents reported the corresponding period a year 
ago. Daily average quotations ranged from a high of 57.61 cents Friday, March 6 to a 
low of 54.52 cents Thursday, March 12. Spot transactions reported in the Daily Spot 
Cotton Quotations for the week ended March 12 totaled 17,289 bales. This compares to 
13,164 reported last week and 74,401 spot transactions reported the corresponding 
week a year ago. Total spot transactions for the season were 1,355,477 bales compared 
to 842,151 bales the corresponding week a year ago. The ICE May settlement price ended 
the week at 59.70 cents, compared to 63.35 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 lower.  Trading of CCC-loan 
equities was inactive. 
     
Sunny to fair conditions over the weekend gave way to cloudy and overcast conditions 
later in the week.  Daytime high temperatures varied from the upper 50s to low 80s.  
Scattered showers brought moisture to areas of north Alabama and southeast Georgia late 
in the period. Precipitation accumulations measured from one-half of an inch to one inch 
of moisture.  Fieldwork advanced in areas where soils were firm enough to support equipment.   
     
Similar conditions were observed across the upper Southeast region during the period.  
Sunny to overcast conditions were observed throughout the week with daytime high 
temperatures in the upper 50s to upper 70s.  Scattered showers brought light to moderate 
moisture to areas throughout South Carolina, eastern North Carolina, and cotton-growing 
areas of Virginia late in the week.  Rainfall totals measured from around one-quarter of 
an inch to one inch of moisture.  Fieldwork and activities advanced in areas where soils 
were firm enough to support equipment. 
 
Textile Mill 

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 
for fourth quarter 2020 delivery.  No sales were reported.  Most mill buyers have covered 
their immediate-to-nearby raw cotton needs.  No additional inquiries were reported.  
Demand for ring-spun and open-end yarn was moderate.  
     
Demand through export channels was moderate.  Agents for mills in Thailand purchased a 
moderate volume of color 31, leaf 3, and staple 36 for nearby shipment. Pakistani mill 
buyers inquired for a moderate volume of color 42 and 51, leaf 5 and better, and staple 34 
and longer for June shipment. 

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 lower.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported.  Cotton prices 
fluctuated due to worldwide uncertainty surrounding the COVID-19 virus. 

Overcast skies, frequent rain showers, and slightly warmer temperatures characterized 
a spring-like weather pattern during the week. Daytime temperatures were in the 60s.  
Overnight lows were in the 40s and 50s.  Rainfall accumulations of up to 2 inches were 
reported in many areas.  River flood warnings issued by the National Weather Service 
remained in effect for numerous locations throughout the region. Roads and fields in 
low-lying areas remained flooded. Saturated soils and extreme cases of standing water 
in fields prevented any type of field activities in many places.  Many producers were 
still considering planting decisions for the coming season due to inclement weather, 
unworkable fields, and commodity market related issues. 
 
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton were moderate.  
Demand was light.  Average local spot prices were lower.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported. Cotton was being 
delivered to fulfill contracts. Financial markets and economic activity in all sectors 
struggled to find positive news as a result of the worldwide effects of the COVID-19 virus. 
     
A warming trend brought daytime temperatures in the 70s and 80s early in the week. 
Low temperatures were in the 50s and 60s.  The National Weather Service maintained 
multiple river flood warnings throughout the region due to the accumulated precipitation 
in recent weeks.  Field activities were at a standstill due to saturated soils and standing 
water in low-lying fields.  Many communities in Louisiana and Mississippi were dealing 
with the effects of flood conditions as high water slowly receded.  Producers were still 
facing uncertain planting decisions due to the wet conditions and low soil temperatures. 

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 slow.  Supplies were moderate. Producer offerings were light. 
Demand was light. Average local spot prices were lower. Producer interest in forward 
contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were 
light. Merchants purchased a light volume of cotton forfeited to the CCC-catalog.  An 
open invitation to bid on a light volume of 2019-crop CCC-catalog cotton closed on March 9. 
Concerns over the Coronavirus continued to pressure the market and limit yarn availability.     
     
Planting cotton continued uninterrupted in the Rio Grande Valley and in the Coastal Bend.  
Wet conditions delayed planting activities in the Blackland Prairies and in the Edwards 
Plateau.  Some producers were eager to sow corn and sorghum before planting cotton as soon 
as the fields firmed enough to support heavy equipment.  Kansas producers are preparing to 
plant more cotton than the previous two seasons.  Reports indicated that a significant 
amount of planting seed has been booked compared to recent years.  One gin continued pressing 
services and submitting samples for grading to the Abilene Classing Office.  Rainfall is 
in the forecast in Kansas and some of the fields are a little soggy.  Some strip tilling 
and ground prep was underway.  The Western Oklahoma Cotton Update meeting and Dicamba 
training were held at Burns Flat, OK.  
 
West Texas 

Spot cotton trading was moderate.  Supplies were moderate. Producer offerings were light.  
Demand was light.  Average local spot prices were lower.  Producer interest in forward 
contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were 
light.  Merchants purchased a moderate volume of cotton forfeited to the CCC-catalog.  
An open invitation to bid on a heavy volume of 2019-crop CCC-catalog cotton closed on 
March 9. Concerns over the Coronavirus continued to pressure the market and hindered the 
logistics of moving Texas cotton around the world. 

Fieldwork restarted with daytime high temperatures in the low 60s to low 80s, and overnight 
lows in the low 30s to low 50s. Fields had begun to dry under windy conditions and between 
rain events. Widespread rainfall brought good planting moisture on March 9. Some areas 
received close to 1 inch of precipitation. A few days of dry windy conditions quickly 
firmed soft fields. Rainfall is in the nearby forecast. Some fields were sprayed with 
pre-emergent and deep plowed. Regional meetings were attended.    

Trading 
 
East Texas 
..
In Oklahoma, a mixed lot containing a moderate volume of mostly color 31, leaf 2 and 3, 
staple 35 and 36, mike 46-52, strength 29-31, and uniformity 79-81 for around 58.50 cents 
per pound, FOB car/truck (compression charges not paid).   
..
A mixed lot containing a light volume of mostly color 32 and 33, leaf 5 and better, staple 34 
and 35, mike 40-47, strength 28-31, uniformity 79-82, and 25 percent extraneous matter sold 
for around 58.50 cents, same terms as above. 
..
A light volume of 2019-crop CCC-catalog cotton, mostly color 31 and 53, leaf 3 and 4, staple 36 
and longer, mike 27-49, strength averaging 27.0, and uniformity averaging 80.0 sold for 
50.65 cents, FOB warehouse (compression charges not paid). 
..
A light volume of 2018 CCC-loan equities traded for around .50 cents. 
..
A light volume of 2019 CCC-loan equities traded for around 7.50 cents. 

West Texas 
..
Mixed lots containing a heavy volume of mostly color 32, leaf 3 and 4, staple 35, mike 27-51, 
strength 26-34, and uniformity 77-83 sold for around 59.50 cents per pound, FOB car/truck 
(compression charges not paid).   
..
A heavy volume of mostly color 12 and 22, leaf 1 and 2, staple 35, mike 43-49, strength 27-35, 
and uniformity 77-82 sold for around 58.75 cents, same terms as above.  
..
A light volume of 2019 CCC-loan equities traded for 2.00 to 7.50 cents. 
..
A heavy volume of 2019-crop CCC-catalog cotton, mostly color 41 and 42, leaf 4, staple 35 and 36, 
mike 27-49, strength 26-33, and uniformity 78-83 sold for 51.25 cents, FOB warehouse (compression charges not paid). 


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.   Supplies were moderate.  Producer offerings and 
demand were light.   Average local spot prices were lower.   No forward contracting 
or domestic mill activity was reported.   The COVID-19 virus expanded into the U.S. 
and concerns associated with the virus produced wild price swings in the stock and 
commodity markets in the period.  Foreign mill inquiries were moderate as ICE futures 
prices trended lower.    
     
Warm, sunny daytime conditions with temperatures into the mid-80s gave way to clouds 
and thunderstorms late in the period in Arizona.  Precipitation amounts were around 
one-quarter of an inch.  Flash flood watches were in effect for most of central Arizona 
for Thursday morning, March 12 through Friday, March 13.  Planting continued in Yuma.  
In early-planted fields, seedlings were up to a good stand.   
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.    
Average local spot prices were lower.  No forward contracting or domestic mill 
activity was reported.  Financial markets and economic activity struggled to find 
positive news as a result of the worldwide effects of the COVID-19 virus.
Foreign mill inquiries were moderate as ICE futures prices trended lower in the period. 
Mill activity was gradually coming back online at about 60 percent capacity.  
Above average temperatures continued.   
     
Temperatures were in the high 70s to low 80s. Rainfall was welcomed on the Valley floor 
late in the period. The north end of the Valley received approximately one-quarter 
of an inch and the south Valley received up to one-half of an inch. No planting was reported.
 
American Pima (AP) 

Spot cotton trading was inactive.  Supplies of 2019-crop cotton were heavy.  Demand was 
light.  Average local spot prices were steady.  No forward contracting or domestic 
mill activity was reported.   Wild price swings in the stock and commodity markets were 
influenced by the expansion of the COVID-19 virus into the U.S.   
Foreign mill inquiries were light. Mills were gradually coming back online up to 60 
percent capacity.  Shippers reported delays at transshipment ports due to congestion, 
compared to vessels shipping directly to port destinations.    
     
Temperatures continued above average in the Far West. Daytime highs were in the 70s to 80s.  
Ginning continued in the SJV. No planting was reported.   

Trading 
 
Desert Southwest 
..
No trading activity was reported.   

San Joaquin Valley 
..
No trading activity was reported.   

American Pima 
..
No trading activity was reported.   



USDA ANNOUNCES SPECIAL IMPORT QUOTA #21 
FOR UPLAND COTTON 
March 12, 2020 


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 March 19, 2020, allowing importation of 
11,243,064 kilograms (51,638 bales of 480-lbs) of upland cotton.  
     
Quota number 21 will be established as of March 19, 2020 and will apply to upland cotton 
purchased not later than June 16, 2020 and entered into the U.S. not later than September 14, 2020. 
The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted 
average rate for the period November 2019 through January 2020, 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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