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USDA - AMS: Weekly Cotton Market Review, narrative (2019-01-04)

USDA U.S. Department of Agriculture - January 4, 2019

   
Mp_cn812 
January 4, 2019 
Weekly Cotton Market Review 
 
 
**Due to Government Shutdown AWP prices and Export data are not included in this issue.** 
 

Spot quotations averaged 130 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 67.09 cents per pound 
for the week ending Thursday, January 3, 2019.  This is the lowest weekly 
average since November 9, 2017 when the average was 66.94. The weekly average was 
down from 68.39 last week and 75.96 cents reported the corresponding period 
a year ago. Daily average quotations ranged from a high of 67.77 cents 
Monday, December 24 to a season low of 66.40 cents Thursday, January 3. 
Spot transactions reported in the Daily Spot Cotton Quotations for the 
week ended January 3 totaled 9,450 bales. This compares to 3,880 reported 
last week and 75,044 spot transactions reported the corresponding week a 
year ago. Total spot transactions for the season were 243,295 bales compared 
to 918,451 bales the corresponding week a year ago. The ICE March settlement 
prices ended the week at 70.83 cents, compared to 72.06 cents last week. 

 
Southeastern Markets Regional Summary 


Spot cotton trading was inactive.  Supplies and producer offerings were moderate. 
Demand was moderate.  Average local spot prices were lower for the week ending 
December 27, 2018, and the week ending January 3, 2019. Trading of CCC-loan 
equities was inactive. 
     
Mostly cloudy and overcast conditions prevailed during the extended two week 
reporting period with unseasonably warm daytime temperatures in the mid-60s to 
low 70s.  Intermittent daily shower activity brought 2 to 4 inches of weekly 
accumulated moisture to areas throughout Alabama, the Florida Panhandle, and 
north Georgia.  Lesser accumulations of about 1 to 2 inches were observed in 
south Georgia.  Harvesting and fieldwork remained at a standstill as most areas 
remained too saturated to support equipment.  Yield and lint quality continued to 
be negatively impacted by the excessive moisture received during the harvest season.  
Ginning resumed following the holidays, but many gins remained idle as they waited 
for backlogs of modules to accumulate on gin yards. 
     
Sunny to fair conditions prevailed across the upper Southeastern region during 
the first part of the extended two week reporting period with seasonably cool 
daytime high temperatures in the low to mid-50s.  Fieldwork advanced in areas 
where soils were firm enough to support equipment.  Later in the period outside 
activities were halted as widespread storms brought around one-half of an inch 
to one inch of moisture to most of the Carolinas and Virginia.  Ginning resumed 
following the holidays, some gins had gone to gin days as they waited for backlogs 
of modules to accumulate on gin yards.  Some gins had completed pressing operations 
for the season. 
 
Textile Mill 

Inquiries from domestic mill buyers were light and no sales were reported.  Most mills 
have covered their immediate-to-nearby raw cotton needs.  Yarn demand was moderate. 
The undertone from mill buyers remained cautious.  Most mills were down one to 
two weeks for the Christmas and New Year’s holidays. 
     
Demand through export channels was light to moderate.  Representatives 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 were light.  
Demand was light.  Average local spot prices were lower for the week ending 
December 27, 2018, and the week ending January 3, 2019.  Trading of CCC-loan 
equities was inactive. No forward contracting was reported. Most merchants 
reported lackluster interest in business as producers remained on the sidelines 
due to uncertainty about trade agreements, disappointing harvest results, and 
fluctuating market conditions. Cotton was being delivered to fulfill contracts; 
no new sales were reported. 

Unseasonably warm weather prevailed during the two-week report period, compared 
with historical daytime average temperatures.  Highs reached into the low 60s; 
low temperatures were seasonably cool in the 30s and 40s.  Persistent showers,
marked by periods of heavy downpours in isolated areas, brought up to 2 inches of 
rainfall to the region.  Ginning was steadily winding down throughout the region.  
The Dumas Classing Office had a single shift operating as necessary, while the 
Memphis Classing Office was also down to a single shift. A few gins in the Memphis 
territory may operate well into January.  Representatives of all of the sectors of 
the cotton industry made plans to attend regional and national industry meetings, 
including the Beltwide meetings   in New Orleans.  According to the U.S. Drought 
Monitor, soil moisture conditions were adequate-to-surplus throughout the region. 
 
South Delta 

Spot cotton trading was inactive. Supplies of available cotton were light.  Demand 
was light.  Average local spot prices were lower for the week ending December 27, 2018, 
and the week ending January 3, 2019.  Trading of CCC-loan equities was inactive. 
No forward contracting was reported. Most merchants reported lackluster interest 
in business as producers remained on the sidelines due to uncertainty about trade 
agreements, disappointing harvest results, and fluctuating market conditions. 
Cotton was being delivered to fulfill contracts, but no new sales were reported. 

Unusually warm weather prevailed during the two-week report period, compared with 
historical daytime average temperatures.  Highs reached into the low 70s; however, 
low temperatures were unseasonably cool, dipping into the low 30s.  A series of 
storm fronts brought several rain events, marked by a few severe thunderstorms 
and heavy downpours in isolated areas. Up to 3 inches of rainfall were reported 
in parts of the region.  Producers made plans to attend various industry meetings, 
including the Beltwide meetings in New Orleans.  According to the U.S. Drought Monitor, 
soil moisture conditions were adequate-to-surplus throughout the region.   

Trading 
 
North Delta 
..
For the week ending December 27, no trading activity was reported. 
..
For the week ending January 3, a light volume of color 31 and better, leaf 3 and 
better, staple 36 sand longer, mike 46-50, strength 29-31, and uniformity 82 
traded for around 72.50 cents per pound, FOB car/truck, (Rule 5, compression charges paid). 

South Delta 
..
No trading activity was reported. 


Southwestern Markets Regional Summary
 

East Texas
 
Spot cotton trading was slow.  Supplies and producer offerings were heavy.  
Demand was good.  Producer interest in forward contracting was light.  
Average local spot prices were lower for the week ending December 27, 2018, 
and the week ending January 3, 2019.  Producers booked a light volume of 
2019-crop cotton. Trading of CCC-loan equities was inactive.  Foreign inquiries 
were heavy for the week ending December 27, 2018, but light for the week ending 
January 3, 2019.  Interest was best from Bangladesh, India, and Pakistan.        
     
Heavy rainfall was received throughout the reporting period in Coastal Bend, 
Upper Coast, and southeast Texas that caused field flooding from waterways that 
had overflowed the banks.   Other areas around Corpus Christi received light, 
scattered showers that brought additional moisture ahead of spring planting.  
Several remaining fields have been submitted for insurance claims.  Fieldwork 
was active on the few sunny days and fertilizer was applied and worked into the 
soil.  Daytime temperature highs in the Corpus Christi and Harlingen areas were 
in the low 50s to low 80s, and overnight lows were in the upper 30s to low 60s.  
Rainfall is needed in the Rio Grande Valley to improve top soil moisture ahead 
of planting, which is expected to begin in February.  Some irrigated fields were 
watered.  Heavy thunderstorms blanketed the Blackland Prairies on December 26, 
which stalled harvesting efforts.  The remaining fields continued to deteriorate.  
Additional precipitation was received intermittently as isolated thunderstorms 
moved across the I-35 corridor from Dallas to Temple.  Western Kansas received 
blizzard-like conditions that brought almost 2 inches of rain and snow, which 
caused a power outage on December 26.  Ginning was temporarily halted.  
Harvesting was estimated at 85 percent completed.  Frigid temperatures brought in 
the New Year with the daytime temperatures in the low 20s to mid-50s and 
nighttime lows were in the low teens to mid-40s.  Parts of Oklahoma received 
rainfall and snow beginning the evening of December 26 through December 27.  
Local reports indicated that up to 5 inches of snow was received that forced 
roads to close.  Harvesting and transporting modules were delayed until snow 
melts and fields firmed.  Approximately 10 percent of fields remained to be harvested.      
        
West Texas 

Spot cotton trading was moderate.  Supplies and producer offerings were heavy.  
Demand was moderate.  Producer interest in forward contracting was light.  
Average local spot prices were lower for the week ending December 27, 2018, 
and the week ending January 3, 2019. Trading of CCC-loan equities was inactive.  
Foreign inquiries were heavy for the week ending December 27, 2018, but light 
for the week ending January 3, 2019.  Interest was best from Bangladesh, India, and Pakistan.        
     
A series of cold fronts moved across the area that hindered field activities 
during the extended reporting period.  A thunderstorm on December 26 brought rain, 
high winds, and foggy conditions.  Intermittent high winds and lightning caused 
some gins to delay pressing services until calmer  conditions returned. 
 A second winter storm on December 28 brought wintry precipitation including 2 
to 4 inches of accumulated snow; mostly in the Panhandle and in Curry and Roosevelt 
Counties of eastern New Mexico.  Most producers had finished harvesting, but 
some modules still remained in the soggy fields as transportation to the gin 
yards was at a standstill.  Another cold front entered the region on December 31, 
and brought dangerously cold wind chill values as low as 15 degrees below zero 
in the Panhandle.  Wintry precipitation was received the evening of January 2, 
which brought icy accumulations mostly in the eastern and southern portions, 
further slowing harvesting, ginning, and transporting of modules.  Daytime 
temperature highs for the extended period were in the low 20s to mid-70s, and 
overnight lows were in the low teens to high 30s.   

Trading 
 
East Texas 
..
For the week ending December 27, in Texas, a light volume of mostly color 31 and 41, 
leaf 4 and better, staple 36 and 37, mike 46-50, strength 27-31, and uniformity 
79-81 sold for around 68.50 cents per pound, FOB warehouse (compression charges not paid).    
..
Mixed lots containing a heavy volume of mostly color 63-85, leaf 6 and 7, staple 34 
and longer, mike 49-53, strength 22-28, uniformity 76-80, and 100 percent extraneous 
matter sold for 32.00 to 32.25 cents, same terms as above. 
..
In Oklahoma, a moderate volume of color 21 and 31, leaf 2 and 3, staple 37 and longer, 
mike 35-45, strength 28-31, and uniformity 78-80 sold for around 74.00 cents, 
FOB car/truck (compression charges not paid).    
..
For the week ending January 3, in Texas, a light volume of mostly color 21, leaf 2, 
staple 35 and 36, mike averaging 50.8, strength 27-30, and uniformity 80-81 sold for 
around 66.50 cents, FOB warehouse (compression charges not paid).    
..
A light volume of mostly color 42, leaf 4 and 5, staple 35 and 36, mike 33-35, strength 
averaging 27.3,   uniformity averaging 79.9, and 100 percent extraneous matter sold 
for around 32.00 cents, FOB car/truck (compression charges not paid).   
..
In Kansas, a light volume of mostly color 31 and 41, leaf 3 and 4, staple 36 and longer, 
mike 30-33, strength 27-29, and uniformity averaging 78.9 sold for around 55.00 cents, same terms as above. 
..
In Oklahoma,  a heavy volume of mostly color 31 and 41, leaf 4 and better, staple 36 
and 37, mike 43-48, strength 30-33, and uniformity 80-82 sold for around 67.50 cents, same terms as above.   

West Texas 
..
For the week ending December 27, a light volume of mostly color 31 and 41, leaf 2 and 3, 
staple 37 and longer, mike 34-44, strength 30-34, and uniformity 79-82 sold for around 
72.50 cents per pound, FOB     car/truck (compression charges not paid).   
..
A light volume of color 31 and 41, leaf 3, staple 36 and longer, mike 38-43, 
strength 31-34, and uniformity 79-81 sold for around 69.50 cents, same terms as above.   
..
A light volume of mostly color 41 and 51, leaf 5, 6, and 7, staple 38 and 39, mike 37-43, 
strength 30-31, uniformity 79-81, and 25 percent extraneous matter sold for 
around 67.00 cents, same terms as above.   
..
For the week ending January 3, a light volume of mostly color 41, leaf 3 and 4, staple 38 
and longer, mike 41-53, strength 31-35, and uniformity 80-84 sold for around 67.50 cents, 
FOB car/truck (compression charges not paid).   
..
A light volume of color 31 and 41, leaf 3 and 4, staple 36 and longer, mike 43-47, strength 29-30,           
uniformity 78-82, and 75 percent extraneous matter sold for around 65.00 cents, same terms as above.   
..
A light volume of mostly color 31, leaf 3 and 4, staple 36, mike 28-35, strength averaging 29.1, and        
uniformity 78-81 sold for around 64.00 cents, same terms as above.   


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies were moderate.  Demand was light. 
With the market in a free fall for week ending December 27 and into the New Year, 
no offerings or sales were reported.    Producers continued to deliver previously 
contracted cotton to merchant and cooperative marketing pools.  Average local spot 
prices were lower for week ending December 27, 2018 and for week ending 
January 3, 2019.  No forward contracting or domestic mill activity was reported.  
Foreign mill inquiries were light.    
     
The first week of January brought hard freezes for southern Arizona, with low 
temperatures in the 30s.  Daytime high temperatures were in the 50s. Several inches 
of snow was reported in Cochise and Graham Counties.  Harvesting was nearly completed, 
with less than 10 percent of fields remained unharvested in central Arizona.  
Gins in Safford were idled by icy, wet conditions.  The cold front moved east into New 
Mexico causing cold and wet conditions late in the period. Sources reported ginning as 
two-thirds completed in New Mexico and El Paso, TX.  Most gins were closed for 
one to two days for New Year’s holiday. 
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light.  Producers delivered 
previously contracted cotton to merchant and cooperative marketing pools.  Average 
local spot prices were lower for week ending December 27, 2018 and for week ending 
January 3, 2019.  No forward contracting or domestic mill activity was reported.      
     
The first week of January brought hard freezes as nighttime temperatures dropped into 
the 30s for the SJV.  Daytime high temperatures were in the 50s.  No rainfall was 
recorded.  Most gins were closed for one to two days for New Year’s holiday.  
The California Department of Water Resources recorded the snowpack’s statewide water 
content at 68 percent of average for this time of year, which is about 7 inches of water. 
Water availability and outlook for 2019 remained a concern in the SJV.    
 
American Pima (AP)
 
Spot cotton trading was inactive.  Supplies were moderate.  Demand was light.    
Average local spot prices were steady.  No forward contracting or domestic mill activity 
was reported.     Foreign mill inquiries were light. AP prices for 2018-crop were under 
pressure as most mills remained on the sidelines.   
     
The first week of January brought hard freeze warnings as nighttime temperatures dropped 
into the 30s in the Far West.  A winter storm produced 3 to 4 inches of snow in 
cotton-growing areas of Cochise and Graham Counties in Arizona.  Daytime high temperatures 
were in the 40s and 50s for the region.  Icy and wet conditions delayed ginning in Safford, 
due to limited module movement.  Ginning continued uninterrupted in California.  Most gins 
were closed for one to two days for New Year’s holiday.   

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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