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USDA - AMS: Weekly Cotton Market Review, narrative (2020-06-12)

USDA U.S. Department of Agriculture - June 12, 2020

  



Mp_cn812  
June 12, 2020 
Weekly Cotton Market Review 
 
 

Average spot quotations were 97 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 56.19 cents per pound for the week ending 
Thursday, June 11, 2020. The weekly average was up from 55.22 last week, but 
down from 61.05 cents reported the corresponding period a year ago. Daily average 
quotations ranged from a high of 57.25 cents Friday, June 5 to a low of 55.48 cents 
Thursday, June 11. Spot transactions reported in the Daily Spot Cotton Quotations 
for the week ended June 11 totaled 9,065 bales. This compares to 24,003 reported 
last week and 5,766 spot transactions reported the corresponding week a year ago. 
Total spot transactions for the season were 1,535,151 bales compared to 1,209,780 
bales the corresponding week a year ago. The ICE July settlement price ended the 
week at 60.02 cents, compared to 60.00 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was inactive. Supplies and producer offerings were light.  
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 worldwide. 
     Sunny to mostly cloudy conditions prevailed over the lower Southeastern region 
during the period.  Daytime high temperatures were in the upper 80s throughout the 
week. Thunderstorms brought varying amounts of moisture to portions of south Alabama, 
south Georgia, and the Florida Panhandle during the period.  Weekly accumulated rainfall 
totals measured from one-half of an inch to about two inches of beneficial moisture. 
The crop progressed well as fields developed normally; local experts reported that 
squaring was observable in most early-planted fields.  In central Georgia, producers 
continued to apply plant growth regulators as squaring steadily expanded.  Insect 
pressure was building across the region.  In addition to thrips and spider mites, 
snails, slugs, and armyworms were present at treatable levels in some fields.  
In Alabama, producers continued to battle grasshoppers and cutworms as populations 
exceeded threshold levels.  Industry members across the region reported that alternate 
crops were planted as the window for sowing cotton closed.  According to the National 
Agricultural Statistics Service’s (NASS) Crop Progress report released June 8, 
squaring had reached 5 percent in Alabama and 18 percent completed in Georgia. 
     
Mostly sunny to partly cloudy conditions prevailed during the week across the upper 
Southeastern region.  Daytime high temperatures were steady in the upper 80s.  
Only trace amounts of precipitation was reported from the Pee Dee region and 
along eastern North Carolina.  Planting in some areas of the Carolinas and Virginia 
advanced, but lagged about one week behind schedule; some producers were forced to 
switch to alternate crops.  Local experts reported that squaring was observable 
in early-planted fields, and the developing stands responded well to the warm, sunny 
weather.  Fields continued to be treated for thrips.  Local experts reported that 
alternate cash crops or prevented planting cover crops could account for most of the 
expected reduction in cotton acreage in the upper Southeastern region.  According to 
the NASS Crop Progress report released June 8, cotton planting averaged 83 percent 
completed in South Carolina, 87 in Virginia, and 85 percent completed in North Carolina, 
with all states being behind the five-year average. Producers and crop advisors 
throughout the Southeast region were coming to grips with the so-called “dicamba disruption”, 
the result of a federal court decision to void registrations on three key dicamba 
formulations used in cotton. 
 
Textile Mill 

Inquiries from domestic mill buyers were light.  No sales 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 third and fourth week of June signaled 
a slight uptick in yarn 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 very light.  No inquiries were reported.  Any interest 
throughout the Far East focused on cotton offered for discounted prices.  The undertone 
from domestic cotton shippers remained cautious as they focused on maintaining export 
commitments already sold. Some small cancellations were reported for Bangladesh, 
Malaysia, and South Korea. 

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 higher.  Trading of CCC-loan equities was inactive. No 
forward contracting was reported.  The COVID-19 Pandemic continues to negatively 
impact the globalized economy. 
     
Tropical Storm Cristobal moved through the region during the week.  High winds downed 
trees, caused structural damage to buildings, and brought down power lines in many areas.  
Heavy rainfall resulted in flash flooding in low-lying places.  Up to 3 inches of 
precipitation were reported in the hardest hit areas.  Daytime temperatures were mostly 
in the upper 80s.  Overnight lows were in the 60s and 70s.  Many stands were treated 
for thrips in Tennessee.  Cotton extension specialists cautioned producers to closely 
scout fields for flare-ups of spider mites as the weather turns hotter. According to 
the National Agricultural Statistics Service’s (NASS) Crop Progress report released on 
June 8, cotton planting was at 96 percent completed in Arkansas and Missouri, and 86 
percent in Tennessee. NASS reported that squaring had reached 1 percent in Arkansas and 
5 percent in Tennessee. Producers and crop consultants were considering the effect that 
the so-called “dicamba disruption” will have on their    on-going struggle to control 
weeds a result of a federal court decision to void registrations on three key herbicide 
formulations, which are tied to certain cotton varieties. Wet conditions have limited 
fieldwork, exacerbating the weed problem. 
      
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 improved during the week, but 
the COVID-19 Pandemic continues to disrupt commerce around the world. 
     
Tropical Storm Cristobal caused varying amounts of damage as it moved through the 
region during the week.  Strong winds toppled trees, caused structural damage to 
buildings, and downed power lines in many areas.  Heavy rainfall resulted in flash 
flooding in low-lying areas.  Up to 4 inches of precipitation were reported in the 
hardest hit places. Thunderstorms brought damaging hail to a few isolated areas.  
Ground and aerial applications of chemicals to control excessive growth were made in 
Louisiana and Mississippi. Cotton stands were treated for plant bugs, as necessary.  
Cotton extension specialists cautioned producers to closely scout fields for flare-ups 
of spider mites as the weather turns hotter. According to the National Agricultural 
Statistics Service’s (NASS) Crop Progress report released on June 8, cotton planting 
advanced normally to 98 percent completed in Louisiana and 91 percent planted in 
Mississippi. NASS reported that squaring had reached 13 percent in Louisiana and 1 
percent in Mississippi. Producers and crop advisors were evaluating the so-called 
“dicamba disruption”, the result of a federal court decision to void registrations 
on three key dicamba formulations tied to certain cotton varieties. 

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 light. 
Demand was moderate. Average local spot prices were higher. Producer interest 
in forward contracting was light. Trading of CCC-loan equities was moderate. 
Foreign inquiries were light.  The COVID-19 Pandemic continued to impact commodity markets.   
     
Producers were encouraged with strong crop vigor in the Upper Coast where 
insect populations were low and weeds had been controlled.  Elsewhere in 
south Texas and in the Rio Grande Valley (RGV), the crop was in bloom, except 
for a few later planted fields   that were squaring. Insecticides and plant 
growth regulators were applied in the RGV.  Stands had begun to square in the 
Blackland Prairies.  Lots of insecticide was applied for fleahoppers and spider mites, 
according to local reports. Producers continued to apply herbicides to control 
weed flushes. Lots of fields were replanted in Kansas following the cold front last 
month.  Replanted fields germinated quickly and are up to 2 true leaves. Dryland 
fields struggled under dry, windy conditions. Rainfall would be beneficial to fortify 
sub-soil moisture levels. Water was applied to the irrigated stands. According to the 
National Agricultural Statistics Service’s Crop Progress report released on June 8, 
planting was 28 percent completed, compared to 40 percent last season, and 58 percent 
for the five-year average in Oklahoma.      
 
West Texas 

Spot cotton trading was moderate.  Supplies were moderate. Producer offerings 
were light.  Demand was light.  Average local spot prices were higher.  Producer 
interest in forward contracting was light. Trading of CCC-loan equities was slow. 
Foreign inquiries were light. The COVID-19 Pandemic continued to impact commodity markets.    
     
Planting continued to make progress around Abilene, Lamesa, and San Angelo.  Isolated 
storms brought beneficial moisture to some areas.  Most areas missed out on rainfall and 
the dryland struggled.  Severe storms with hail and wind gusts in the 90s damaged stands 
from Plainview to Post.  Irrigation water was applied, but a widespread rain event would 
help supplement the stands.  Thrips increased and some producers applied treatments.  Weeds were managed.   
 
Trading 
 
East Texas 
..
In Kansas, a heavy volume of mostly color 42, leaf 3 and better, staple 35 and longer, 
mike 35-51, strength 27-36, uniformity 78-83, and 50 percent extraneous matter sold for 
around 48.75 cents per pound, FOB    car/truck (compression charges not paid).   
..
In Oklahoma, a heavy volume of mostly color 32 and better, leaf 5, staple 36 and longer, 
mike 30-46, strength 28-33, uniformity 79-82, and 100 percent extraneous matter sold 
or around 48.75 cents, same terms as above.  
..
A light volume of 2019 crop CCC-loan equities sold for 0.40 to 5.50 cents.   

West Texas 
..
A heavy volume containing mostly color 11 and 21, leaf 3 and better, staple 33, mike 41-48, 
strength 27-31, and uniformity 77-79 sold for around 53.75 cents per pound, 
FOB car/truck (compression charges not paid).   
..
A heavy volume of color 41 and better, leaf 4 and better, staple 33 and longer, mike 42-52, 
strength 26-33, and uniformity 77-81 sold for around 51.50 cents, same terms as above.     
..
A light volume of 2019 CCC-loan equities traded for 1.25 to 2.50 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. The effects of the COVID-19 Pandemic slowed the marketing 
chain for cotton.   Foreign mill inquiries were light.     
     
In Arizona, temperatures were mild in the 90s for most of the period.  A ridge of 
high pressure returned triple-digit temperatures late in the period.    
The crop made great progress and is in good condition.  Cotton at squaring stage 
was 45 percent compared to the   five-year average of 20 percent, as reported by 
the National Agricultural Statistics Service (NASS) on June 8.  Hot, dry conditions 
were the norm this week for New Mexico and El Paso, TX. Temperatures were in the low 
to mid-100s early in the period. Strong winds dried topsoil. According to NASS, cotton 
plantings was 85 percent completed compared to the five-year average of 92 percent. 
Emergence was reported at 70 percent. The crop made good progress.   
 
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. 
The COVID-19 Pandemic continued to impact the U.S. economy.  Foreign mill inquiries 
were light. Interest was best for new-crop Brazilian cotton.   
     
June weather continues to bring surprises.  Moderate temperatures were in the 80s for 
most of the week.  No rainfall was recorded.  Thunderstorms were reported in the Sierra 
Nevada Mountain range, with a light dusting of snow in elevations over 8,000 feet.  
Producers tilled and watered the crop.  Cotton at squaring stage was 12 percent near 
the five-year average as reported by the National Agricultural Statistics Service on 
June 8. The crop made good progress.   
 
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.   According to the Foreign Agricultural 
Service export report for week ending June 4, there were 3,400 bales of new sales and no 
cancellations.   Export sales were at 428,500 bales of 2019-crop AP was committed.  
Sales for marketing year 2020 were reported at 33,900 bales.   
     
Moderate temperatures were reported for Arizona and California as a high pressure system 
off the coast keep temperatures below the century mark for most of the period. New Mexico 
and El Paso, TX temperatures were in the low to mid-100s. No rainfall was received in 
cotton-producing areas.  Some San Joaquin Valley fields of California received their 
first irrigations in the period.  Local California industry sources reported that the crop 
made excellent progress. Overall, the crop made good progress in the Far West.   

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 #8 
FOR UPLAND COTTON 
June 11, 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 June 19, 
2020,  allowing importation of 11,005,386 kilograms (50,547 bales of 480-lbs) of upland cotton.  
     
Quota number 8 will be established as of June 19, 2020 and will apply to upland cotton 
purchased not later than September 15, 2020 and entered into the U.S. not later than 
December 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 January 2020 
through March 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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