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USDA - AMS: Weekly Cotton Market Review, narrative (2020-07-17)

USDA U.S. Department of Agriculture - July 17, 2020


Mp_cn812 
July 17, 2020 
Weekly Cotton Market Review 
 


Average spot quotations were 82 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 59.09 cents per pound for the week ending 
Thursday, July 16, 2020. The weekly average was down from 59.91 last week, but up from 56.58 cents 
reported the corresponding period a year ago. Daily average quotations ranged from a high of 
60.57 cents Friday, July 10 to a low of 58.30 cents Wednesday, July 15. Spot transactions reported 
in the Daily Spot Cotton Quotations for the week ended July 16 totaled 21,274 bales. This compares to 
13,090 reported last week and 3,250 spot transactions reported the corresponding week a year ago. 
Total spot transactions for the season were 1,594,602 bales compared to 1,264,938 bales the corresponding 
week a year ago. The ICE Oct settlement price ended the week at 62.88 cents, compared to 64.34 cents last week. 


Southeastern Markets Regional Summary 

 
Spot cotton trading was inactive. Supplies and producer offerings were moderate. 
Demand was light. Average local spot prices were lower.  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. 
     
Mostly sunny and seasonally warm conditions dominated the weather pattern across the lower Southeast 
throughout the period. Daytime high temperatures were in the low to mid-90s.  Scattered thunderstorms 
brought moderate precipitation to areas throughout the region.  Weekly accumulated rainfall totals 
measured from 2 to 5 inches in areas of southwest and northwest Alabama and the Florida Panhandle, 
with lesser accumulations observed in other areas.  Producers welcomed the moisture which reduced 
stress and invigorated plants.  The crop advanced at a good pace and squaring and boll-setting made 
good progress. Plant growth regulator applications were underway and fields were sprayed with herbicides. 
The bollworm moth flight that developed last week in south Alabama expanded in the state and had moved 
into the Florida Panhandle.  Producers treated fields for localized infestations of tarnished plant bugs 
across the region.  In Georgia, areas that have usually required treatments for whiteflies in the past were 
sprayed.  According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released 
July 13, cotton squaring had reached 79 percent completed in Georgia and 77 percent completed in Alabama. 
     
Mostly sunny and hot conditions dominated the weather patter across the upper Southeast during the period.  
Daytime high temperatures were in the mid-90s.  Scattered thunderstorms brought moisture to localized areas 
of eastern North Carolina and the Pee Dee region of South Carolina. The heaviest precipitation totals 
measured from 2 to 4 inches.  Producers welcomed the moisture which reduced plant stress and invigorated crops.  
Fields were blooming across the region.  In South Carolina, insect pressure was light and scouts reported 
healthy populations of beneficial insects that help reduce cotton plant pests.  In North Carolina, some fields 
were treated for aphid and plant bugs, but pressure was generally light and easily controlled.  Tarnished 
plant bug populations were spotty.  According to the NASS Crop Progress report released July 13, cotton 
squaring had reached 62 percent completed in North Carolina, 58 in South Carolina, and 54 percent completed in Virginia. 
 
Textile Mill 

Inquiries from domestic mill buyers were very light.  No sales were reported.  The undertone from mill buyers 
remained cautious as mills continued to operate at reduced capacity, due to lackluster demand associated with 
the COVID-19 Pandemic.  Some mills planned to bring idled plants back into operation in late July or early 
August as orders increase.  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.  Agents for mills throughout the Far East inquired 
for any discounted styles of cotton. 

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 lower.  Trading of CCC-loan equities was slow. No forward 
contracting was reported.  The COVID-19 Pandemic continues to negatively impact the overall 
global economy; many multinational corporations reported layoffs affecting tens of thousands 
of employees.  The number of daily cases of the COVID-19 continues to grow, especially in the 
United States and Latin America. 

The crop made good progress under hot and humid growing conditions. A series of thundershowers 
brought less than 1 inch of rain to a few areas, with heavier amounts reported in localized spots. 
Thunderstorm activity is expected in the      near-term forecast, which should provide beneficial 
moisture to dry fields in places that receive some precipitation.  Daytime temperatures were mostly 
in the 90s, with the heat index throughout the territory over 105 degrees due to high humidity.  
Overnight lows were in the 70s.  The National Weather Service issued heat advisories and air quality 
alerts for most of the region. Boll shedding was reported due to high temperatures.  Fields were being 
carefully scouted to insure that outbreaks of plant bugs and spider mites were identified and treated.  
Pressure from weeds, especially pigweed, was intense in fields where dicamba was not available as a 
control method.  Producers were considering mechanical cultivation and manual chopping to control weed 
infestations.  Producers reported that many fields were blooming, and plant growth regulators were applied, 
as necessary.  According to the National Agricultural Statistics Service’s Crop Progress report released 
on July 13, cotton setting bolls had reached 20 percent in Arkansas and in Tennessee. No boll-setting 
was reported in Missouri, where crop development was at least two weeks 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 lower.  Trading of CCC-loan equities was inactive. No forward contracting was reported. 
The COVID-19 Pandemic continues to disrupt travel, trade, and many normal activities around the world as 
the number of daily cases continues to grow, particularly in the United States and in Latin America. 
     
The crop made good progress under hot and humid growing conditions. A series of thundershowers brought 
less than 1 inch of rain to most of the region. The weather forecast is calling for mostly hot and dry 
conditions in the next few days.  Daytime temperatures were mostly in the 90s, with the heat index up 
to 110 degrees in some places due to high humidity.  Overnight lows were in the upper 70s.  Insect pressure 
from plant bugs was building in parts of Mississippi and Louisiana.  Fields were treated as necessary to 
control heavy infestations.  Bollworm moth populations were lighter than anticipated; a few fields received 
treatments to control outbreaks.  Boll shedding was reported in some places as a result of the extreme 
temperatures, and plant growth regulators were applied to fields, as necessary.  According to the National 
Agricultural Statistics Service’s Crop Progress report released on July 13, boll-setting had reached 37 
percent in Louisiana and 16 percent in Mississippi.  Both figures were behind the five-year average by at least two weeks.   

Trading 
  
North Delta 
..
A light volume of CCC-loan equities traded for 3.50 to 4.75 cents per pound. 
 
South Delta 
..
No trading activity was reported.   


Southwestern Markets Regional Summary      .


East Texas 

Spot cotton trading was slow.  Supplies and producer offerings were moderate.  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. Interest was best from China. The Loan 
Deficiency Payment remains in effect. The lack of demand and the COVID-19 Pandemic turmoil disrupted 
marketing infrastructure.    
     
In the Rio Grande Valley, a few fields were harvested, but most producers were finishing corn 
and grain harvest. Bolls were popping open and some fields received defoliants and harvest aid 
applications.  Late season thrips and whitefly pressure were reported.  Harvesting activities 
will expand the last week of July.  Bolls had begun to crack open in the Upper Coast. In the 
Blackland Prairies, stands progressed and varied from beginning to bloom to full bloom. Insect 
pressure was light. Weeds were managed and under control.   
     
In Kansas, frequent showers brought beneficial rainfall to the fields that needed moisture. 
Stands are squaring and setting bolls. Plant growth regulators and insecticide were applied. 
In Oklahoma, the crop was late and cotton had just began to bloom. The dryland and irrigated 
benefitted from recent rainfall.   
 
West Texas 

Spot cotton trading was slow. Supplies and producer offerings were moderate.  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. Interest was best from China.  
The Loan Deficiency Payment remains in effect. The COVID-19 Pandemic continued to impact commodity markets.    
     
Dryland struggled with daytime temperature highs in the low 100s to low 110s.  A few locations reached 
111 to 114 degrees.  Overnight lows were in the upper 70s to mid-80s.  Irrigation was applied to keep up 
with water demand. Some stands have begun to bloom and others were squaring. A few stands had reached 
cutout during the heat wave. Insect pressure was low. Fleahoppers were carefully monitored and several 
fields were treated. Producers were not eager to apply controls due to managing input costs. Industry 
members stayed connected and conducted virtual meetings.     
 
Trading 
 
 
East Texas 
..
In Kansas, a light volume of mostly color 32 and better, leaf 1 and 2, staple 37, mike averaging 28.6, 
strength averaging 30.2, and uniformity averaging 79.1 sold for around 41.25 cents per pound, FOB         
car/truck (compression charges not paid).   
..
In Oklahoma, a light volume of mostly color 32 and better, leaf 2-4, staple 35 and longer, 
mike 33-50, strength 28-32, and uniformity 79-82 sold for around 53.25 cents, same terms as above. 
..
A heavy volume of new-crop south Texas cotton color 31, leaf 3, and staple 37 was sold to Korean mills.  
..A heavy volume of 2019 CCC-loan equities traded for 0.25 to 6.00 cents. 
 
West Texas 
..
A light volume containing mostly color 43, leaf 4 and better, staple 37 and 38, mike 40-50, strength 30-36, 
and uniformity averaging 82.3 sold for around 57.75 cents per pound, FOB car/truck (compression charges not paid).   
..
A light volume containing mostly color 11 and 21, leaf 1 and 2, staple 34-36, mike averaging 48.4, 
strength averaging 31.8, and uniformity averaging 80.2 sold for around 56.50 cents, same terms as above.  
..
A heavy volume of 2019 CCC-loan equities traded for -0.75 to 4.25 cents. 


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 slowed the marketing chain for cotton.  Average local spot prices 
were lower.   No forward contracting or domestic mill activity was reported. Foreign mill 
inquiries were light and mostly for price discovery.     
     
Record high temperatures were prevalent throughout the DSW.  Temperatures were in the     
mid-100s in New Mexico and El Paso, TX to the     mid-to-high 110s in central Arizona.  
Conditions were ideal for monsoon developments. Afternoon thunderstorms were prevalent 
in higher elevations.  Heat stress is a concern.  Arizona producers began irrigations to 
provide relief to cotton plants.  The crop made good progress.    
No significant insect pressures were reported.   
 
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 and cotton demand.  Average local spot prices were lower.  
No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were 
light.   Hot and dry conditions continued.  Temperatures were in the low to mid-100s.    
     
The heat advanced the crop.  Producers were irrigating and applying herbicide.  The crop 
made excellent progress and stand development was very uniform from field to field.   
Sources reported that the crop was setting up to carry a good boll load.  No insect pressures 
were reported.  The California Department of Food and Agriculture’s Pink Bollworm Program report 
released July 7, mapped approximate SJV cotton acreage at 171,094 with 6 counties reporting. The 
Department is awaiting acreage reports from northern and southern California.   Upland and 
American Pima acreage amounts will be reported separately later in the growing season.      
 
American Pima (AP) 

Spot cotton trading was inactive. Supplies of2019-cro p 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 the livelihood of citizens across the nation 
and world, thus the demand for cotton.  Foreign mill inquiries were light. Mills inquired for 
new-crop cotton.  Shippers continued to offer 2019-crop cotton.  Interest was best from China, 
India, and Korea.   
     
Hot, dry conditions were reported throughout the Far West.  Temperatures were in the 100s to the     
mid-110s. The heat advanced the crop.  Blooming and boll-setting were reported in central Arizona.  
Producers began irrigations to help combat heat stress.  Level 2 heat stress was reported for 
several days in Arizona.  Blooming expanded in the San Joaquin Valley (SJV) of California.  
SJV producers were busy running irrigations and applying herbicide. Some producers applied plant 
growth regulators. No significant insect pressures were reported.   Overall, the crop made excellent progress in the Far West.   

Trading 
 
Desert Southwest 
..
A light volume of New Mexico cotton mostly color 31, leaf 3 and better, staple 35-37, mike 37-47, strength 27-30, 
and uniformity 79 and 80 sold for 60.00 to 62.50 cents per pound, FOB car/truck (compression charges not paid).  

San Joaquin Valley 
..
No trading activity was reported.   

American Pima 
..
No trading activity was reported.   


USDA ANNOUNCES SPECIAL IMPORT QUOTA #13 
FOR UPLAND COTTON 
July 16, 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 
July 23, 2020,   allowing importation of 3,892,413 kilograms (17,878 bales of 480-lbs) of upland cotton.  
     
Quota number 13 will be established as of July 23, 2020 and will apply to upland cotton purchased not later than 
October 20, 2020 and entered into the U.S. not later than January 18, 2021. The quota is equivalent to one week's 
consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2020 through 
May 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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