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USDA - AMS: Weekly Cotton Market Review, narrative (2020-05-29)

USDA U.S. Department of Agriculture - May 29, 2020



Mp_cn812 
May 29, 2020   
Weekly Cotton Market Review 




Average spot quotations were 37 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 53.51 cents per pound 
for the week ending Thursday, May 28, 2020. The weekly average was down 
from 53.88 last week, and 63.56 cents reported the corresponding period 
a year ago. Daily average quotations ranged from a high of 53.91 cents 
Wednesday, May 27 to a low of 53.14 cents Thursday, May 28. Spot transactions 
reported in the Daily Spot Cotton Quotations for the week ended May 28 totaled 
13,916 bales. This compares to 7,312 reported last week and 8,237 spot 
transactions reported the corresponding week a year ago. Total spot transactions 
for the season were 1,502,083 bales compared to 1,185,338 bales the corresponding 
week a year ago. The ICE July settlement price ended the week at 57.57 cents, 
compared to 58.06 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was moderate. Supplies and producer offerings were 
moderate.  Demand was light.   Average local spot prices were weak.  
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. 
     
A mix of sunny to rainy and overcast conditions were observed during the 
period across the lower Southeastern region.  Daytime high temperatures 
varied from the low 70s to low 90s.  Intermittent rain events brought 
moisture to areas throughout Alabama, the Florida Panhandle, and Georgia. 
Weekly accumulated precipitation totals measured from one-half of an inch to 
four inches, with locally heavier totals observed in some areas.  Planting 
advanced at a rapid pace as dry conditions allowed, but fieldwork was delayed 
in portions of Alabama and Georgia where the heaviest rainfall occurred.  
Seedlings were emerging and a period of warm and dry conditions would be welcome 
to advance the crop.  In Alabama and Florida, producers treated fields for 
infestations of grasshoppers.  Thrips were also present at treatable levels in some 
fields across the region.  According to the National Agricultural Statistics 
Service’s (NASS) Crop Progress report released May 26, cotton planting had reached 
79 percent completed in Alabama and 57 percent completed in Georgia. 
     
Tropical storm Bertha made landfall along the South Carolina coast early Wednesday, 
May 27 and quickly weakened into a tropical depression as it tracked northward through 
North Carolina and Virginia.  Weekly accumulated precipitation totals measured from 
1 to 5 inches along the coastal Carolinas and central North Carolina.  River flood 
warnings were issued in some areas.  Planting and fieldwork continued during the 
period, but has been delayed by consistent downpours across the upper Southeastern 
region.  Planters will remain idle in many locales until soils are firm enough to 
support equipment.  In some areas, producers are considering replanting options as 
seedlings failed to make a stand due to heavy rainfall.  According to the NASS Crop 
Progress report released May 26, cotton planting had reached 57 percent completed 
in Virginia, 56 in South Carolina, and 46 percent completed in North Carolina. 
 
Textile Mill 

Buyers for domestic mills inquired for a light volume of 2020-crop cotton, color 41, 
leaf 3, and staple 37  for November/December delivery.  No sales were reported.  
No additional inquiries were reported.  The undertone from mill buyers remained 
very cautious, due to closures or reduced schedules associated with the COVID-19 
virus.  Most mills continue to operate at minimal capacity, but cotton deliveries 
scheduled at some locales the first and second week of June signaled a slight uptick 
in production. Mills continued to produce personal protective equipment for frontline 
workers and military supplies in response to the COVID-19 Pandemic. 
     
Demand through export channels was light-to-moderate.  Chinese mill buyers inquired 
for a moderate volume of 2020-crop cotton, no sales were booked.   

Trading 
..
A moderate volume of color mostly 31 and 41, leaf 3 and 4, staple 38 and 39, mike 37-49, 
strength 29-31, and uniformity 81-83 sold for around 50 points on ICE July futures, 
FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). 
..
A moderate volume of color mostly 21 and 31, leaf 2-4, staple 37 and 38, mike 43-49, 
strength 28-30, and uniformity 80-83 sold for around 61.00 cents per pound, same terms as above. 
..
A moderate volume of color mostly 41, leaf 3 and 4, staple 37 and 38, mike 43-49, strength 
29-31, and uniformity 81-82 sold for around 55.00 cents, same terms as above. 
..
A moderate volume even-running lot containing color mostly 41 and 51, leaf mostly 4 and 5, 
staple 38, mike 37-49, strength 29-31, and uniformity 81-83 sold for around 52.25 cents, 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 weak.  Trading of CCC-loan 
equities was slow. 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. 
Severe weather struck the region early in the week.  Downed trees and limbs 
caused power outages in many areas. Some structural damage to homes and 
businesses was also reported.  Partly cloudy and warm weather prevailed during 
the remainder of      the week. Frequent thunderstorms brought approximately 
1 inch of precipitation to the region. Daytime temperatures were mostly in the 
upper 80s.  Overnight lows were in the 60s.  Fieldwork advanced slowly in 
Missouri, due to wet and cold soil conditions. Producers were considering 
their options under the rules for prevented planting, which included planting 
beyond insurance cut-off dates, planting a different crop, or planting a 
cover crop.  According to the National Agricultural Statistics Service’s 
Crop Progress report released on May 26, cotton planting was at 72 percent 
completed in Arkansas, 30 in Missouri, and 47 percent in Tennessee, all 
of which were 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 weak.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported.  Commodity prices 
fluctuated during the week as the COVID-19 Pandemic continues to disrupt 
manufacturing supply chains around the world. 
     
Cloudy to partly clear skies prevailed during the week. Daytime temperatures 
were in the 80s.  Warmer overnight temperatures were in the 60s. Scattered 
showers brought up to 2 inches of precipitation, while heavier amounts 
were received in isolated areas.  Planting continued at a steady pace in 
most areas throughout Louisiana, but lagged in Mississippi, in part due to 
thunderstorms.  Some fields that were too wet to support equipment received 
aerial applications of chemicals to control thrips and other insect pests.   
According to the National Agricultural Statistics Service’s Crop Progress 
report released on May 26, cotton planting advanced normally to 83 percent 
in Louisiana and 72 percent planted in Mississippi. 

Trading 
  
North Delta 
..
A moderate volume of CCC-loan equities traded for 2.00 to 4.00 cents per pound. 

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 weak.    
No forward contracting or domestic mill activity was reported.  Trading 
of CCC-loan equities was inactive. Foreign mill inquiries were light.  
New-crop interest was best from China.  The COVID-19 Pandemic continued 
to put pressure on commodity markets.   
     
Temperatures were in the high 80s to mid-90s in the Rio Grande Valley (RGV).  
Strong thunderstorms produced heavy rains, lighting, and hail.  Precipitation 
amounts ranged from one-third of an inch up to one and one-quarters of an inch.  
Local RGV sources reported the irrigated crop looked good.  Dryland cotton 
plants received beneficial rains, the prospect was improved, but maybe too 
little too late as some fields reached cutout.   A few fields were zeroed 
out for insurance early in the period, prior to recent rain events. The 
crop continued to bloom, while boll-setting was reported.   In the Blackland 
Prairies, Coastal Bend, and Upper Coast damaging weather was received late in 
the period.  Thunderstorms produced strong winds, hail, and heavy rains.  
Rainfall amounts ranged from one and one-half inches up to two inches.  
Flooding was reported in low-lying areas.  Strong winds toppled trees.   
Temperatures were in the 70s to low 80s in Kansas.  Rainfall was received 
across the state.  Around one-half of an inch to one inch of beneficial 
moisture was received in western Kansas.  Approximately three-quarters of 
an inch to two and one-quarter inches was received in central to eastern 
Kansas; respectively.  Planting was completed in western Kansas.  In central 
and eastern Kansas, soil temperatures were not suitable as back to back 
rain events slowed planting.  Local sources estimated around 35 to 50 
percent of the crop was planted.  Some fields were too wet.  Cotton 
fields across the state were being evaluated due to possible hail 
damage and a cold snap from 2 weeks ago.  Producers scouted for insect 
damage, but no treatable pest populations were reported.   The Kansas 
crop needs clear, dry, and hot weather to progress the crop.  Plans were 
back on schedule to build a warehouse in Wichita that will store around 
150,000 bales. Cotton-growing areas of western Oklahoma received 
three-quarters of an inch up to one and one-third of an inch of moisture 
in the period.  Most of the irrigated cotton was planted.  Dryland acreage 
benefitted from the recent rainfall.  Soil moisture conditions also improved. 
Sources estimated that approximately 35 to 45 percent of the dryland 
crop was planted in Oklahoma.   
 
West Texas 

Spot cotton trading was light. Supplies were moderate.  Producer offerings 
were light.  A few gin recaps were offered, mostly for price discovery.  
No new sales were reported.  Demand was light.  Average local spot prices were 
weak.   Foreign mill inquiries were light.  Interest was best from Bangladesh, 
Pakistan, and Turkey for 2019-crop cotton.  China inquired for new-crop cotton.  
No new sales were reported.  The COVID-19 Pandemic continued to impact commodity 
markets.  No forward contracting or domestic mill activity was reported.  
Trading of CCC-loan equities was inactive.   
     
Temperatures were mostly in the 80s. Strong storms brought scattered showers, 
hail, and high winds early in the reporting period.  Reports of tennis ball sized 
and golf ball sized hail was reported in some areas.  Officially, nearly 
three-quarters of an inch of moisture was recorded, but some areas received over 
two inches.  Cotton fields were being evaluated.  Dryland cotton was dusted; 
many of those fields did not have cotton up.   Planting is active in the region 
where soils were dry enough to support equipment.  Many producers will continue 
to dry plant cotton in order to meet the May 31 planting deadline.  Sources 
estimated around 30 to 40 percent was planted.  A few High Plains counties 
reported pill bugs, thrips, and wireworms.  Treatments were made.    
Overall, the crop continued to make progress.   

Trading 
 
 
East Texas 
..
In Kansas, a light volume mixed lot containing mostly color 31, leaf 4 and 
better, staple 35 and 36, mike    41-43, strength 29-30, uniformity 81 and 82, 
with 75 percent extraneous matter sold for around 49.50 cents per pound, FOB 
car/truck (compression charges not paid). 
..
A light volume mixed lot of mostly color 33 and 43, leaf 4 and 5, staple 36 
and 37, mike 36-42, strength   29-30, uniformity 80-82, with 100 percent extraneous 
matter sold for around 39.25 cents, same terms as above.   
..
In Oklahoma, a light volume of mostly color 31, leaf 3 and 4, staple 36-37, mike 35-43, 
strength 30-33, and uniformity 80-82 sold for around 53.50 cents, same terms as above.   
..
Similar lots containing staple 33-36, and mike 46-50 sold for around 52.00 cents, same terms as above.   

West Texas 
..
A light volume of color 11-31, leaf 3 and better, staple 31-33, mike 41-46, 
strength 27-29, and uniformity 76-79 sold for around 42.00 cents per pound, 
FOB car/truck (compression charges not paid). 

 
Western Markets Regional Summary
 

Desert Southwest (DSW) 

Spot cotton trading was inactive.   Supplies were moderate. Demand was light.    
The effects of the COVID-19 Pandemic continues to disrupt the marketing chain 
for cotton.  Average local spot prices were weak.   No forward contracting or 
domestic mill activity was reported.  Trading of CCC-loan equities was light. 
Foreign mill inquiries were light.       
     
Temperatures reached the mid-to-high 100s in Arizona.  Excessive heat warning 
was in effect through mid-evening of May 29 in western Arizona. In central 
Arizona, excessive heat warnings were in effect through Sunday, May 31. The Yuma 
crop made good progress as the crop was setting bolls.  Producers irrigated the 
crop to help reduce heat stress.  The crop made good progress in the DSW.   
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light. The COVID-19 
Pandemic continued to impact the U.S. economy.  Average local spot prices were weak.  
No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light.    
     
High temperature records were broken in some areas of the SJV as daytime highs 
reached 106 degrees on Wednesday, May 27.  Excessive heat warnings were in effect 
through May 28.  The crop responded to the heat and made good progress.  
Temperatures were on the way down in the near-term forecast.  Producers irrigated 
the crop to combat heat stress.   
 
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.   Shippers continued to maintain previously 
made sales contracts.   Some contract obligations were rolled to 2021.    
     
Excessive heat with temperatures in the high 100s prompted heat warnings in the Far West.  
Producers managed heat stress by applying water to the crop.  The crop made good progress.   


Western Markets Regional Summary      .
Maria Townsend    ....Visalia, CA   ...........................Maria.Townsend@usda.gov 

Trading 
 
Desert Southwest 
..
A light volume of CCC-loan equities was sold for around 5.25 cents per pound.   

San Joaquin Valley 
..
No trading activity was reported.   

American Pima 
..
No trading activity was reported.   
 

USDA ANNOUNCES SPECIAL IMPORT QUOTA #6 
FOR UPLAND COTTON 
May 28, 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 
February 6, 2020, allowing importation of 12,240,623 kilograms (56,220 bales) of upland cotton.  
     
Quota number 15 will be established as of February 6, 2020 and will apply to upland 
cotton purchased not later than May 5, 2020 and entered into the U.S. not later than 
August 3, 2020. The quota is equivalent to one week's consumption of cotton by domestic 
mills at the seasonally-adjusted average rate for the period September 2019 through November 
2019, 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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