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USDA - AMS: Weekly Cotton Market Review, narrative (2020-05-22)

USDA U.S. Department of Agriculture - May 22, 2020



Mp_cn812  
May 22, 2020 
Weekly Cotton Market Review 
 

Average spot quotations were 108 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 53.88 cents per pound 
for the week ending Thursday, May 21, 2020. The weekly average was up from 
52.80 last week, but down from 61.55 cents reported the corresponding period 
a year ago. Daily average quotations ranged from a low of 53.37 cents Monday, 
May 18 to a high of 54.77 cents Tuesday, May 19. Spot transactions reported 
in the Daily Spot Cotton Quotations for the week ended May 21 totaled 7,312 
bales. This compares to 21,979 reported last week and 12,871 spot transactions 
reported the corresponding week a year ago. Total spot transactions for the 
season were 1,488,167 bales compared to 1,177,101 bales the corresponding week 
a year ago. The ICE July settlement price ended the week at 58.06 cents, 
compared to 57.85 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. The COVID-19 Pandemic 
continues to negatively affect cotton demand and disrupt supply chains. 
     
Partly cloudy to overcast conditions prevailed across the lower Southeastern 
region during most of the period.  Daytime high temperatures varied from the 
mid-70s to mid-80s.  Scattered thundershowers brought 1 to 3 inches of moisture 
to areas across Alabama, Georgia, and the Florida Panhandle over the weekend and 
early week.  Planting advanced at a rapid pace and producers welcomed the moisture 
received during the period.  Producers scouted the earliest-planted fields where 
seedlings were emerging and treated areas where pest populations met threshold limits. 
According to the National Agricultural Statistics Service’s (NASS) Crop Progress 
report released May 18, cotton planting had reached 63 percent completed in Alabama 
and 41 percent completed in Georgia. 
     
Mostly cloudy conditions prevailed across the Carolinas and Virginia during the 
period.  Daytime high temperatures were in the low to mid-80s.  Widespread storms 
brought moderate to heavy moisture to the Carolinas and cotton growing areas of 
Virginia during the week.  Rainfall totals measured from 1 to 4 inches.  Planting 
activity expanded at a rapid pace, but was delayed in some areas due to wet conditions.  
According to the NASS Crop Progress report released May 18, cotton planting had reached 
45 percent completed in South Carolina, and 34 percent completed in North Carolina and Virginia. 
 
Textile Mill 

Mill buyers made initial inquiries for 2020-crop cotton, color 41, leaf 3, and staple 37 for       
November/December delivery. No sales were reported.  Additional inquiries were very light.  
The undertone from mill buyers remained very cautious, due to lackluster retail sales and 
diminished end user demand associated with the COVID-19 virus.  Mills have begun incremental 
increases in production as supported by finished product orders. Most production centered on 
personal protective equipment for frontline workers and military supplies in response to the 
COVID-19 Pandemic. 
     
Demand through export channels was light to moderate.  Representatives for mills in Turkey 
purchased mixed lot recaps containing color 51 and better, leaf 4 and better, and staple 34 
and longer for nearby shipment.  Agents throughout the Far East inquired for any discounted 
styles of cotton.  
 
Trading 
..
A moderate volume of color mostly 41 and 51, leaf mostly 3 and 4, staple 35-38, mike 37-49, 
strength 28-31, and uniformity 80-83 sold for around 400 points off ICE July 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 and demand were light. 
Average local spot prices were higher.  Trading of CCC-loan equities was inactive. No 
forward contracting was reported. Commodity prices struggled to gain much ground as the 
COVID-19 Pandemic continues to negatively impact financial markets and manufacturing supply 
chains around the world. 

Partly cloudy and cool weather prevailed during the week. Most areas reported rainfall 
of less than 1 inch. Daytime temperatures were mostly in the 60s to 80s. Overnight lows 
were in the 50s and 60s.  Fieldwork advanced in most places, but planting was hampered in 
Missouri by wet and cold soil conditions and advanced slowly in low-lying fields throughout 
the region. Local experts attributed good germination under adverse conditions to strong seed 
vigor of new varieties; a few producers reported some replanting.  Some producers were switching 
to short-season varieties in order to continue sowing cotton beyond their normal planting window. 
According to the National Agricultural Statistics Service’s Crop Progress report released on May 
18, cotton planting was at 47 percent completed in Arkansas, 15 in Missouri, and 23 percent in 
Tennessee, all of which were well behind the five-year average. 
  
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light.  
Average local spot prices were higher.  Trading of CCC-loan equities was inactive. No 
forward contracting was reported.  Commodity prices fluctuated during the week and the 
COVID-19 Pandemic continues to disrupt manufacturing supply chains around the world. 
    
Cloudy to partly clear skies prevailed during the week.  Daytime temperatures reached into 
the 80s.  Warmer overnight temperatures were in the 60s. Scattered showers brought less than 
1 inch of rain to most areas, but up to 2 inches of heavy precipitation were received in isolated 
areas.  Planting expanded at a normal pace in most areas throughout Louisiana, but lagged in 
Mississippi, in part due to wet fields.  Developing stands were treated for thrips and field 
crickets, as necessary.   According to the National Agricultural Statistics Service’s Crop 
Progress report released on May 18, cotton planting advanced normally to 75 percent completed in 
Louisiana.  Progress was good in Mississippi, at 52 percent planted, which is about one week 
behind the five-year average. 
 
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 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 inactive. 
Foreign mill inquiries were light. The COVID-19 Pandemic continued to put pressure 
on commodity markets.  ICE futures market gains early in the period were lost 
by the end of the week. 
     
Temperatures were in the mid-to-high 90s in the Rio Grande Valley (RGV).  
Areas Victoria south to the RGV received 1 inch of beneficial rain early in 
the period. Hot, humid conditions continued with thunderstorms possible into the 
weekend.  Producers scouted for insect damage, but no heavy pest populations were 
reported.    In the Coastal Bend and Upper Coast, the crop made progress as showers 
deposited up to two and one-quarter inches of rainfall. Local sources reported that 
the crop made good progress and recent rainfall boosted crop potential.      
 
West Texas 

Spot cotton trading was light.  Supplies were moderate.  Producer offerings were 
light.  Demand was light.  Average local spot prices were higher.   No forward 
contracting or domestic mill activity was reported.  Trading of  CCC-loan equities 
was inactive.  The COVID-19 Pandemic continued to put pressure on commodity markets. 
ICE futures market gains early in the period were lost by the end of the week.   
     
Temperatures were in the low 90s, with a one-day high of 100 degrees reached on 
Tuesday, May 19.    Scattered rain showers brought much needed moisture and deposited 
around one-quarter of an inch up to three-quarters of an inch. Strong winds and       
quarter-sized hail stones did some damage to young cotton plants.  Planting is active.  
Irrigated acreage plantings were virtually completed.  Producers made great strides in 
dryland plantings.  Planting is ahead of schedule, due to hot, dry weather in April.             
Early-planted cotton was up.  Overall, seedlings made good progress.  Some areas reported 
insect activity like wireworms and thrips.  Chemical treatments were made to combat pests.   

Trading 
 
East Texas 
..
In Texas, a moderate volume of mostly color 31, leaf 4, staple 37 and 38, mike 
averaging 41.8, strength averaging 32.5, and uniformity averaging 81.8 sold for 
around 54.50 cents per pound, FOB warehouse (compression charges not paid). 
..
In Kansas, a light volume of color 21 and 31, leaf 2 and better, staple mostly 38, 
mike averaging 43.4, strength averaging 33.4, and uniformity averaging 80.9 sold for 
around 58.00 cents, FOB car/truck (compression charges not paid).   
..
In Oklahoma, a light volume of mostly color 21 and 31, leaf 3 and better, staple 36 
and 37, mike averaging 39.4, strength averaging 32.9, and uniformity averaging 80.7 
sold for around 58.25 cents, same terms as above.   
..
A light volume of color mostly 31, leaf 2 and 3, staple mostly 35 and 36, mike averaging 50.5, 
strength averaging 32.6, and uniformity averaging 82.1 sold for around 54.00 cents, same terms as above.   
..
A light volume of color 31 and 41, leaf 4 and better, staple 34-36, mike averaging 47.7, 
strength averaging 32.9, uniformity averaging 81.2, with 25 percent extraneous matter 
sold for around 52.00 cents, same terms as above.   
 
West Texas 
..
A light volume mixed lot of color mostly 21 and 32, leaf 3 and better, staple 34-37, mike 
averaging 44.6, strength averaging 31.7, and uniformity 80.1 sold for around 53.00 cents 
per pound, FOB car/truck (compression charges not paid). 
..
Similar lots containing mostly staple 34, with mike 50 and higher sold for around 
52.00 to 52.50 cents, same terms as above.   
..
A light volume of 2019 CCC-loan equities traded for around 4.25 cents.   


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive. Supplies were moderate.  Demand was light.  
Average local spot prices were higher.  No forward contracting or domestic 
mill activity was reported.  Foreign mill inquiries were light. The effects 
of the COVID-19 Pandemic continues to disrupt the marketing chain for cotton.     
     
Temperatures reached the high 90s to low 100s early in the period for Arizona.  
No rainfall was recorded in the week.  The Yuma crop reached blooming stage.  
In parts of central Arizona, fields sowed in mid-March approached pinhead 
square stage.  Little to no insect activity was reported. Overall, the crop 
made good progress in the DSW.   
 
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.  Foreign mill inquiries were light.   The COVID-19 Pandemic 
continued to impact the U.S. economy.   
     
Two low pressure systems the last two weeks kept temperatures under the century 
mark, almost unheard of for late May. Cloudy conditions and thunderstorms moved 
into the Valley and brought rainfall.  Approximately one-quarter of an inch of 
beneficial moisture was received mid-week. Snowfall was received in higher elevations 
over 7,000 feet in the Sierra Nevada Mountain range.  The crop is ready for 
more heat.  By all accounts, the crop made good progress.  Germination rates were good.   
  
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. Interest was best from China.  
Shippers continued to maintain previously made sales contracts. Some contract 
obligations were rolled to 2021. According to the Foreign Agricultural Service Export 
report for week ending May 14, 600 bales of new sales were noted and no cancellations.  
Sales for the next marketing year were reported at 33,800 bales.   
     
Temperatures ranged from the 70s to the low 100s in the Far West.  The San Joaquin Valley 
of California received strong winds, rain, and some hail mid-week.  No damage to cotton 
fields was reported.  The crop is off to a good start.  Germination rates were excellent, 
but crop progress slowed with the cool down.  The crop needs more heat.  The crop made good progress in the DSW.   

Trading 
 
Desert Southwest 
..
No trading activity was reported.   
 
San Joaquin Valley 
..
No trading activity was reported.   

American Pima 
..
No trading activity was reported.   

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