Mp_cn206
Weekly Cotton Market Review
August 7, 2020
Spot quotations averaged 255 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
59.28 cents per pound for the week ending Thursday, August 6, 2020.
The weekly average was up from 56.73 last week and from 53.47 cents
reported the corresponding period a year ago. Daily average quotations
ranged from a low of 58.01 cents Friday, July 31 to a season high of
59.77 cents Thursday, August 6. Spot transactions reported in the
Daily Spot Cotton Quotations for the week ended August 6 totaled
65,659 bales. This compares to 17,733 reported last week and 2,872
spot transactions reported the corresponding week a year ago. Total
spot transactions for the 2019-2020 marketing year were 1,620,966
bales compared to 1,278,960 bales at the end of the 2018-2019 marketing
year. The ICE Oct settlement price ended the week at 64.41 cents,
compared to 62.82 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 moderate. No forward
contracting was reported. The COVID-19 Pandemic continues to
negatively affect cotton demand and disrupt supply chains.
Mostly cloudy to sunny conditions prevailed across the lower
southeastern region during the period. Daytime high temperatures
were in the upper 80s to low 90s. Localized thunderstorms brought
from trace amounts to around one inch of weekly accumulated precipitation
to portions of central Alabama and areas throughout Georgia. Hurricane
Isaias brought beneficial moisture to coastal Georgia. The crop made
good progress. In areas that received rainfall, producers welcomed
the moisture that helped alleviate hot, dry conditions and relieved
heat-stressed plants. Producers maintained full irrigation schedules.
In Georgia, fruit shedding was observed in dryland fields that have
missed significant rainfall in recent weeks. Whiteflies were present
in southwest Georgia, southeast Alabama, and the Florida Panhandle,
and populations were reported as expanding beyond historical ranges
in a few areas. Some later planted fields with younger plants required
multiple treatments for the pests. Hot and dry conditions allowed spider
mites to flair in some areas. Stink bugs, plant bugs, and escaped bollworms
were also present at treatable levels in several fields. According to the
National Agricultural Statistics Service�s (NASS) Crop Progress report
released August 3, cotton squaring neared completion and boll-setting
reached 76 percent completed in Georgia and 73 percent completed in Alabama.
Hurricane Isaias made landfall near Ocean Isle Beach, North Carolina on
the evening of Monday, August 3 and gained momentum as it tracked up the
east coast. Strong winds blew around plants in fields along coastal
areas of the Carolinas and Virginia impacted by the storm. Around one
to four inches of beneficial moisture was also received in portions of
the eastern Carolinas and Virginia. Producers welcomed the moisture,
which relieved heat-stressed plants and helped to reduce spider mite
populations. Stink bugs and plant bugs were present at treatable
levels in some fields, but infestations were spotty. According to
the NASS Crop Progress report released August 3, boll-setting had
reached 64 percent completed in North Carolina, 59 in Virginia, and
48 percent completed in South Carolina.
Textile Mill
Domestic mill buyers booked a light volume of 2020-crop cotton,
color 41, leaf 3, and staple 37 for November/December delivery. No
additional inquiries or sales were reported. The undertone from mill
buyers remained cautious as mills operated at reduced capacity due to
lackluster demand associated with the COVID-19 Pandemic. Mills
continued to produce personal protective equipment for frontline
workers and military supplies in response to the COVID-19 disease.
Demand through export channels was very light. Indonesian mill
buyers purchased a light volume of color 31, leaf 3, and staple
36 for September shipment. Agents for mills in Vietnam inquired
for a light volume of color 41, leaf 3, and staple 37 for nearby
shipment; no sales were reported.
Trading
A moderate volume mixed lot containing color mostly 52 and 53,
leaf 3-5, staple 33-35, mike 43-50, strength 26-28, and uniformity
79-81 sold for around 42.00 cents per pound, FOB car/truck, Georgia
terms (Rule 5, compression charges paid, 30 days free storage).
A heavy volume 2019 CCC-loan equity traded for 5.25 to 8.75 cents.
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 slow. No forward contracting
was reported. The COVID-19 Pandemic continues to negatively
impact the overall global economy. The number of daily cases
of the COVID-19 disease continues to grow, especially in the
United States and Latin America.
A cooling trend characterized the weather pattern during the
week. Daytime temperatures were mostly in the 80s and 90s.
Overnight lows were in the mid-60s, which provided welcome
relief from the intense heat of the previous few weeks. Producers
were carefully monitoring fields for insect pests. Many fields
were treated for infestations of plant bugs, bollworms, and spider
mites. Weeds were under control in most places, but were a problem
in some fields due to the lateness of the crop. Plant growth
regulators were applied as necessary to control excessive
vegetative growth. The crop made steady progress under good
weather conditions; boll setting advanced rapidly in Tennessee.
According to the National Agricultural Statistics Service�s
(NASS) Crop Progress report released on August 3, cotton setting
bolls had reached 95 percent in Arkansas, 28 in Missouri, and 67
percent in Tennessee. Crop development was near the 5-year
average in Arkansas and Tennessee, but lagged at least 3 weeks
behind in Missouri. However, local experts there reported that
fields looked good and boll loads were heavy. NASS reported
that the crop condition was mostly good-to-excellent in
Arkansas, and fair-to-good in Missouri and Tennessee.
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 slow. No
forward contracting was reported. The COVID-19 Pandemic
continues to negatively impact economic activity around
the world. The number of daily cases continues to grow,
especially in North and South America.
Cooler weather prevailed during the week. Daytime
temperatures dropped into the upper 80s to low 90s.
Overnight lows were in the low 70s. A series of thundershowers
brought around 2 inches of beneficial moisture to Mississippi
and provided some relief form hot temperatures. The crop made
excellent progress under good growing conditions. Local experts
reported that more fields had reached cut-out, while many fields
were still in bloom. Insect pressure from plant bugs and bollworms
was heavy in parts of Mississippi and Louisiana; spider mites were
a problem in drier areas. Fields were treated as necessary to control
infestations. Boll shedding was reported in some places as a result
of adverse weather conditions, but producers remained optimistic about
good yields due to heavy fruiting. Many fields have received several
applications of plant growth regulators to control excessive vegetative
growth. According to the National Agricultural Statistics Service�s
(NASS) Crop Progress report released on August 3, boll setting had
reached 90 percent in Louisiana and 70 percent in Mississippi;
Mississippi lagged about 1 week behind average for this time of
the season. NASS reported that the crop condition was mostly
good-to-excellent in Louisiana, and fair-to-good in Mississippi.
Trading
North Delta
A light volume of CCC-loan equities traded for 2.50 cents per pound.
South Delta
A light volume of CCC-loan equities traded for 2.50 cents per pound.
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
higher. Producer interest in forward contracting was light.
Trading of CCC-loan equities was active. Foreign inquiries were
light. Interest was best from China, Indonesia, Pakistan, Taiwan,
and Vietnam. The Loan Deficiency Payment remains in effect. The
lack of demand and the COVID-19 Pandemic disrupted marketing
infrastructure.
The Rio Grande Valley is still assessing damages from Hurricane
Hanna. Some of the hardest hit counties were Cameron, Hidalgo,
and Willacy. Many fields had been defoliated and bolls were open
before Hanna, which played a big part in the initial assessment of
a 90 to 100 percent loss on about 125,000 acres. In areas not as
severely hit from Hanna, growers were able to resume harvesting and
defoliating, but the occurrence of seed sprout is a concern. In the
Coastal Bend and Upper Coast, there is some concern over quality and
yield loss, but overall potential yields are expected to be well above
average.
In Kansas, both irrigated and dryland crops progressed well.
Temperatures were in the low-to-mid 80s. More heat units are needed
to finish out the crop; higher temperatures in the nearby forecast
have producers optimistic. Cotton crop conditions were fair to good
according to the National Agricultural Statistics Service�s (NASS)
Crop Progress report released August 3. In Oklahoma, temperatures
were cooler in the upper 80s. A good rain is needed to progress the
crop. Insect pressure was light. Producers were encouraged to scout
for bollworms and other pest. Crop conditions were mostly good, according to NASS.
West Texas
Spot cotton trading was slow. Supplies and 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 moderate. Foreign inquiries were light. Interest was best from China
and Pakistan. The Loan Deficiency Payment remains in effect. The
COVID-19 Pandemic restrictions continued to impact commodity markets.
Daytime temperatures were in the low to upper 90s, with overnight
lows ranging from the mid-60s to low 70s. Late in the period, temperatures
rose into the triple digits adding stress to already droughty conditions.
Scattered showers brought less than 1 inch of precipitation. Sources
report an estimated loss of about 75 percent in dryland cotton for some
areas, due to drought. The irrigated crop is progressing nicely, but a
beneficial rain is needed to help finish out the crop and give overworked
wells some relief. No insect pressure was reported.
Trading
East Texas
In Kansas, a light volume of 2019-crop mostly color 31 and 41, leaf 2 and 3,
staple 36-37, mike 41-44, strength 29-31, and uniformity 80 and 81 sold for
around 60.25 cents per pound, FOB car/truck (compression charges not paid).
In Oklahoma, a light volume of 2019-crop color 31 and 41, leaf 2 and 3,
staple 37 and 38, mike 46-48, strength 29-31, and uniformity 78-82 sold
for around 60.00 cents, same terms as above.
A light volume of mostly color 31 and 41, leaf 2 and 3, staple 31-35,
mike 35-44, strength 27-32, uniformity 76-81, and 50 percent extraneous
matter sold for around 51.00 cents, same terms as above.
A light volume of 2018-crop color 41-43, leaf 1-6, staple 32-38, mike
averaging 47.3, strength averaging 28.2, and uniformity averaging 79.1
sold for around 42.00 cents, same terms as above.
A heavy volume of 2019-CCC-loan equities traded for 0.00 to 0.75 cents
West Texas
A mixed lot of 2019-crop containing a light volume of mostly color 32
and better, leaf 2 and 3, staple 33, mike 41-50, strength 24-31, and
uniformity 77-84 sold for around 49.25 cents per pound, FOB car/truck
(compression charges not paid).
A light volume mixed lot containing color 21, 31, and 41, leaf 2-6,
staple 32-37, mike 41-51, strength 26-33, uniformity 78-83, and 25
percent extraneous matter sold for around 52.50 cents, same terms as above.
A light volume of 2019-CCC-loan equities traded for 0.50 to 1.00 cents.
Southwestern Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was slow. Supplies were moderate. Demand was light.
Average local prices were higher. No forward contracting or domestic mill
activity was reported. The Loan Deficiency Payment remained in effect.
Trading of CCC-loan equities was moderate. Foreign mill inquiries were
light for 2019-crop cotton. Inquiries for October to January shipments
were moderate for new-crop. The COVID-19 Pandemic continued to adversely
impact the U.S. economy and cotton demand.
Heat units were building in Arizona and the crop made good progress with
daytime temperature highs in the low to mid-100s. Overnight temperatures
in the 70s gave stands a moment to rest and recover from heat stress.
Irrigation was underway. Strong crop vigor was noted for stands in
Wilcox, AZ with daytime temperatures in the mid-90s with an overnight
reprieve in the high 60s. A storm moved across Safford, AZ that brought
a light amount of hail damage to a few stands. Bolls were opening and
harvest aids were applied in Yuma, AZ. Harvesting was expected to begin
in 7 to 10 days. In Arizona, cotton setting bolls was at 95 percent,
ahead of 80 last year, and 79 percent of the five-year average, according
to the National Agricultural Statistics Service�s (NASS) Crop Progress
report released August 3. Stands in New Mexico advanced and benefited
from rainfall. Cotton setting bolls in New Mexico was at 48 percent,
ahead of 12 from the previous year, and 41 percent for the five-year
average, according to NASS. Producers in El Paso, TX were encouraged
as the crop advanced. Some hail was received and damage was under
evaluation. Insect pressure was light and fields were irrigated.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were light.
Average local 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 Loan Deficiency Payment remained
in effect. The COVID-19 Pandemic continued to impact markets.
In the SJV, daytime high temperatures were in the upper 80s to low 100s,
and overnight lows were in the upper 50s to mid-60s. Stands were blooming
and some received final irrigation water. Insect pressure was light and
below treatable levels. Producers monitored fields for weed escapes. The
crop was rated good to excellent, according to the National Agricultural
Statistics Service�s Crop Progress report published on August 3. Boll
setting was at 65 percent, near 63 last year, and the 66 percent five-year average.
American Pima (AP)
Spot cotton trading was inactive. Supplies were moderate. Demand was light.
Average local prices were steady. No forward contracting or domestic mill
activity was reported. Foreign mill inquiries were light. The Pima Competitive
Payment remained at 7.00 cents. The COVID-19 Pandemic continues to negatively
influence cotton demand and disrupt supply chains.
In the San Joaquin Valley, producers were optimistic about the stands and
some applied final irrigation water. Plants were blooming. The AP acres in
Yuma, AZ approached harvest with daytime temperatures reaching 113 to 116
degrees. Bolls were popping open and harvest aids were applied. Stands had
reached peak bloom Central Arizona. Insect monitoring was underway and some
treatments were applied. Storms brought beneficial rainfall and hail in El
Paso, TX. Damage was reported as mild and assessments were ongoing. The crop
matured in New Mexico and benefited from recent intermittent rainfall.
Producers in El Paso and New Mexico were expecting above average yields
and optimism was high. Overall, the crop made excellent progress in the
Far West.
Trading
Desert Southwest
A light volume of 2019-crop New Mexico cotton mostly color 31 and 41, leaf 3,
staple 36 and 37, mike averaging 46.1, strength averaging 30.8, and uniformity
averaging 80.1 sold for around 61.00 cents per pound, FOB car/truck (compression
charges not paid).
Similar lots of New Mexico cotton mostly color 21 and 31, leaf 2 and 3, staple
34 to 37, mike 47-50, strength 28-31, and uniformity 78 and 81 traded for around
60.00 to 60.50 cents, same terms as above.
A heavy volume of 2019-CCC-loan equities traded for 4.75 to 7.50 cents.
San Joaquin Valley
No trading activity was reported.
American Pima
No trading activity was reported.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #16
FOR UPLAND COTTON
August 6, 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
August 13, 2020, allowing importation of 1,809,441 kilograms (8,311 bales of
480-lbs) of upland cotton.
Quota number 16 will be established as of August 13, 2020 and will apply to
upland cotton purchased not later than November 10, 2020 and entered into the U.S.
not later than February 8, 2021. The quota is equivalent to one week's consumption
of cotton by domestic mills at the seasonally-adjusted average rate for the period
April 2020 through June 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.