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USDA - AMS: Weekly Cotton Market Review, narrative (2020-04-24)

USDA U.S. Department of Agriculture - April 24, 2020

 
Mp_cn812   
April 24, 2020 
Weekly Cotton Market Review 



Average spot quotations were 220 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 49.75 cents per pound for the week ending 
Thursday, April 23, 2020. The weekly average was up from 47.55 last week, but down from 72.49 
cents reported the corresponding period a year ago. Daily average quotations ranged from a low 
of 48.07 cents Friday, April 17 to a high of 51.58 cents Thursday, April 23. Spot transactions 
reported in the Daily Spot Cotton Quotations for the week ended April 23 totaled 18,459 bales. 
This compares to 22,698 reported last week and 8,277 spot transactions reported the corresponding 
week a year ago. Total spot transactions for the season were 1,426,206 bales compared to 1,108,450 
bales the corresponding week a year ago. The ICE July settlement price ended the week at 56.37 
cents, compared to 53.02 cents last week. 


Southeastern Markets Regional Summary


Spot cotton trading was slow.  Supplies and producer offerings were moderate. Demand was light.  
Average local spot prices were higher.  Trading of CCC-loan equities was inactive.  No forward 
contracting was reported. Producers considered spring planting options as the COVID-19 Pandemic 
continues to negatively impact economic activity.  
     
Fair to mostly cloudy conditions prevailed across Alabama, the Florida Panhandle, and Georgia 
during the period.  Daytime high temperatures were in the upper 70s to low 80s.  Widespread 
thunderstorms brought moderately heavy moisture to areas across the region over the weekend and 
late in the week.  Precipitation totals measured from 1 to 3 inches, with heavier accumulations 
observed in some areas.  Planting was getting underway.  In areas where fields were firm enough 
to support equipment, producers applied burndown and fertilizer in between rain events.  However, 
windy conditions prevented the application of herbicide sprays in some areas. Low-lying areas 
remained saturated and inaccessible.  Producers continued to carefully manage crop inputs, due to 
low cotton market prices. 
     
Fair to mostly clear conditions were observed across the Carolinas and Virginia during the period.  
Daytime high temperatures varied from the low 60s to mid-70s. Scattered thunderstorms brought light 
precipitation to the upper Southeastern region early in the week.  Precipitation totals measured 
around 1 inch of moisture in portions of southern South Carolina and the cotton growing region of 
eastern Virginia.  Elsewhere, rainfall totals measured around one-half of an inch.  Producers were 
busy preparing fields, applying fertilizer, lime, and burndowns.  Some low-lying areas remained 
saturated and inaccessible.  Planting had begun on a limited basis, but was delayed due to cool 
temperatures. Producers continued to carefully manage crop inputs to reduce costs due to low cotton market prices. 
 
Textile Mill 

Inquiries from domestic mill buyers were very light.  No sales were reported.  The undertone 
from mill buyers remained very cautious as they continued to delay or reschedule deliveries of 
raw cotton due to closures or reduced schedules associated with the COVID-19 virus.  Some mills 
planned to remain closed until early May; other mills were gradually resuming operations on a 
limited basis as supported by finished product orders.  Most production centered on face masks, 
surgical gowns, and medical products in response to the COVID-19 Pandemic. 
     
Demand through export channels was light-to-moderate.  Agents throughout the Far East inquired for 
any discounted styles of cotton.  


Trading 
..
A moderate volume of color 51 and better, leaf 4 and better, staple 35 and 36, mike 43-52, strength 
30-32, and uniformity 81-83 sold for around 200 points off ICE May futures, FOB car/truck, Georgia 
terms (Rule 5, compression charges paid, 30 days free storage). 


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.  The COVID-19 Pandemic continues to disrupt financial markets and consumer 
supply chains around the world. 

A few sunny days, mixed with clouds and intermittent rain showers, prevailed during the week.  
Thunderstorms late week brought accumulated rainfall of up to 1 inch to many areas. Daytime temperatures 
were mostly in the 60s and 70s.  Overnight lows were in the 40s and 50s.  Fieldwork and other activities 
were hampered due to unfavorable soil conditions from persistent rain showers and cool temperatures.  
A few rural areas were without electrical power due to recent severe weather.  Local experts and extension 
specialists indicated that very little cotton will be planted in April, due to cold and wet soils; the 
short-term forecast called for more severe weather.  River flood warnings issued by the National Weather 
Service remained in effect for numerous river watersheds.   Some low-lying fields remained completely 
submerged throughout the region.   
  
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.  The COVID-19 Pandemic continues to disrupt the global economy as countries struggle to 
contain the spread of the deadly virus. 
     
Several days of clear skies, mixed with clouds and light rain showers, prevailed during most of the week.  
Heavy thunderstorms late week brought accumulated rainfall of up to 4 inches to some areas, while around 2 
inches were reported generally.  Daytime temperatures were in the 70s and 80s, with lows in the 50s and 60s.  
Power had yet to be restored to some rural homes due to recent severe weather.  River flood warnings issued 
by the National Weather Service remained in effect for numerous locations throughout the region. Low-lying 
portions of fields along streams and rivers remained flooded or saturated in many areas.  Field activities 
were delayed due to soft, cold soils in many areas.  Planting continued in fields that were firm enough to 
support equipment and where soil temperatures were conducive to good germination.   According to the National 
Agricultural Statistics Service’s Crop Progress report released on April 20, cotton planting advanced to 7 
percent completed in Louisiana and 5 percent in Mississippi.  Both figures were slightly ahead of the 
five-year average, in spite of unfavorable planting conditions. 

Trading 
  
North Delta 
..
No trading activity was reported.   

South Delta 
..
A moderate volume of CCC-loan equities were offered for sale at around 1.00 to 4.00 cents per pound.  No sales were reported. 


Southwestern Markets Regional Summary      .


East Texas
 
Spot cotton trading was light.  Supplies and producer offerings were moderate.  Demand was light.  
Average local spot prices were higher.    No forward contracting or domestic mill activity was reported.  
Trading of CCC-loan equities was slow.  Foreign mill inquiries were light. The COVID-19 Pandemic continued 
to put pressure on commodity markets.   
     
Temperatures were in the 90s in the Rio Grande Valley (RGV) with spotty scattered showers.  The crop in the 
RGV needs moisture.  Local sources reported that the crop made good progress and still had potential. The 
crop was treated for aphids and fleahoppers. In the Coastal Bend and Upper Coast, the crop made progress 
as scattered showers gave a boost. Kansas and Oklahoma producers worked fields in preparation for planting.  
Soils had plenty of moisture. Local sources were unsure of how much cotton would be planted.  
Growers still have some time to decide.    
 
West Texas 

Spot cotton trading was light.  Supplies and producer offerings were moderate.  Demand was light.  
No forward contracting or domestic mill activity was reported.  Merchant pool sign ups were open and 
active, with some companies extending producer sign ups through April 30.  Average local spot prices 
were higher.  Trading of CCC-loan equities was inactive.  Foreign mill inquiries were light.  
The COVID-19 Pandemic continued to negatively impart economic activity.   
     
Daytime high temperatures were mostly in the high 70s to low 80s for most of the week.  No rainfall was 
recorded in the period.  Producers were busy preparing fields for planting. Local sources were unsure of 
planting intensions, and some were figuring to be lower than last year’s plantings.    

Trading 

East Texas 
..
In Texas, a moderate volume mixed lot of mostly color 12 and 22, leaf 3 and better, staple 36-38, 
mike averaging 43.7, strength averaging 31.1, and uniformity averaging 80.7 sold for around 52.00 cents 
per pound, FOB warehouse (compression charges not paid). 
..
A moderate volume of mostly color 12-32, leaf 3 and better, staple 35, mike averaging 42.0, strength 
averaging 30.8, and uniformity averaging 80.6 sold for around 49.50 cents, same terms as above.    
..
In Oklahoma, a light volume of color 21 and 31, leaf mostly 2, staple 35-37, mike averaging 46.1, 
strength averaging 32.2, and uniformity averaging 82.2 sold for around 53.00 cents, FOB car/truck 
(compression charges not paid). 
..
A light volume of color mostly 31 and 22, leaf 3 and better, staple 32-34, mike averaging 51.7, strength 
averaging 30.4, and uniformity averaging 81.0 sold for around 43.50 cents, same terms as above.   
..
A light volume of 2019 CCC-loan equities traded for around 15 to 20 points per pound. 
..
A light volume of 2018 CCC-loan equities traded for around 1.50 to 2.50 cents. 

West Texas 
..
A heavy volume mixed lot of mostly color 41 and 32, leaf 5 and better, staple 35-38, mike averaging 
44.5, strength averaging 31.0, and uniformity averaging 80.4 sold for around 49.00 cents per pound, FOB        
car/truck (compression charges not paid). 
..
A light volume of color 21 and 22, leaf 2 and better, staple 32-35, mike averaging 43.6, strength 
averaging 29.9, and uniformity averaging 78.7 sold for around 48.00 cents, same terms as above. 
..
A light volume of color 31 and 32, leaf 4 and better, staple 32-34, mike averaging 47.1, strength 
averaging 29.5, and uniformity averaging 80.9 sold for around 46.25 cents, same terms as above.   
..
A light volume of 2019 CCC-loan equities traded for around 1.00 to 2.00 cents.   


Western Markets Regional Summary


Desert Southwest (DSW) 

Spot cotton trading was slow. Supplies were moderate. Demand was light. The COVID-19 Pandemic 
continues to affect demand for cotton. Average local spot prices were higher.   No forward 
contracting or domestic mill activity was reported.      Foreign mill inquiries were light.     
     
Cotton made excellent progress in Yuma, AZ.  Planting was active throughout Arizona, New Mexico, 
and El Paso, TX.  Sources reported cotton seedlings were up in Safford, AZ.  An increase in planting 
acreage was reported for El Paso, TX.  The El Paso County Water Improvement District 1 released 
irrigation water for producers on March 13 for March 17 delivery.  This is one of the earliest release dates in several years.   
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light. The COVID-19 Pandemic continued to 
impact U.S. and global economies.  Average local spot prices were higher.  No forward contracting or domestic 
mill activity was reported.  Foreign mill inquiries were light.         
     
Planting was active as temperatures in the 80s warmed soils.  Sources reported plantings could be down as 
much as 20 to 30 percent.  Price, water availability, and low demand were cited as factors.   
 
American Pima (AP) 

Spot cotton trading was inactive.  Supplies of 2019-crop cotton were moderate.  Demand was light.  
Average local spot prices were steady. No forward contracting or domestic mill activity was reported.  
The COVID-19 Pandemic continues to affect demand for cotton. Foreign mill inquiries were light.     
     
Sunny, warm conditions advanced planting throughout the Far West.  Some early planted cotton was up in 
Safford, AZ.  An increase in acreage was reported for El Paso, TX, due to plenty of irrigation water available. 
Sources indicated declines in acreage for Arizona and California.   

Trading 
 
Desert Southwest 
..
A moderate volume of mostly color 41 and 51, leaf 4 and better, staple 35, mike averaging 45.0, strength 
averaging 31.00, and uniformity averaging 80.9 sold for around 48.00 cents per pound, uncompressed, FOB warehouse.    

San Joaquin Valley 
..
No trading activity was reported.   

American Pima 
..
No trading activity was reported.   







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