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USDA - AMS: Weekly Cotton Market Review, narrative (2019-01-18)

USDA U.S. Department of Agriculture - January 18, 2019



Mp_cn812  
January 18, 2019 
Weekly Cotton Market Review  
 
 
 
Spot quotations averaged 61 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 68.77 cents per pound 
for the week ending Thursday, January 17, 2019. The weekly average was up from 68.16 last 
week, but down from 79.04 cents reported the corresponding period a year ago. Daily average 
quotations ranged from a low of 68.00 cents Tuesday, January 15 to a high of 70.12 cents 
Thursday, January 17. Spot transactions reported in the Daily Spot Cotton Quotations for 
the week ended January 17 totaled 54,137 bales. This compares to 28,690 reported last 
week and 95,760 spot transactions reported the corresponding week a year ago. Total spot 
transactions for the season were 326,122 bales compared to 1,162,776 bales the 
corresponding week a year ago. The ICE March settlement prices ended the week at 
74.37 cents, compared to 72.85 cents last week. 


Southeastern Markets Regional Summary 


Spot cotton trading was moderate.  Supplies  and producer offerings were moderate. 
Demand was moderate.  Average local spot prices were firm. Trading of CCC-loan equities was inactive. 
     
Partly to mostly cloudy conditions prevailed over the weekend and early week, but clear 
conditions were observed later in the period. Daytime high temperatures varied from the 
upper 40s to low 60s with nighttime lows in the 30s to 50s.  Scattered moisture was 
received in portions of north Alabama and north Georgia.  Rainfall totals generally 
measured from trace amounts to around one-half of an inch in some areas.  Fieldwork and 
harvesting continued in areas where soils were firm enough to support equipment.  
Ginning continued; a few gins expected to complete pressing operations for the season 
in the next week.  The Macon Classing Office maintained two shifts to accommodate the 
steady flow of samples that continued to arrive.   
     
Mostly cloudy conditions were observed across the upper Southeastern region during the period.  
Daytime high temperatures varied from the mid-30s to upper 50s.  Nighttime lows were in the 
low 20s to low 40s.  Shower activity brought light-to-moderate rainfall to areas throughout 
North Carolina and Virginia during the week. Precipitation totals measured from around 
one-quarter of an inch to one-inch of day-to-day accumulated moisture.  Fieldwork was limited.  
Ginning was rapidly winding down for the season.  Some gins remained on gins days as they 
waited for the last fields to be harvested and modules to arrive on gin yards. 
The Florence Classing Office had a single shift operating daily.  Producers, ginners, and 
industry members throughout the Southeastern region attended the Southern Southeastern 
annual meeting in Hilton Head, SC. 
 
Textile Mill 

Domestic mill buyers inquired for a moderate volume of color 42 and better, leaf 5 and better, 
and staple 34 and longer for third and fourth quarter 2019 delivery.  Mill buyers also made 
initial inquiries for a moderate volume of 2019-crop cotton, color 41, leaf 4, and staple 
34 for January through December 2020 delivery.  No sales reported.  Most mills have covered 
their immediate-to-nearby raw cotton needs. Demand through export channels was light-to-moderate. 
Representatives for mills throughout the Far East inquired for any discounted styles of cotton.   

Trading 
..
Even-running lots containing color mostly 31 and 41, leaf 2-4, staple 36, 37, and 38, mike 43-49, 
strength   27-30, and uniformity 80-82 sold for 25 to 75 points off ICE March futures, 
FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). 
..
A moderate volume mixed lot containing color 31 and 41, leaf 3 and 4, staple 36-38, mike 37-49, 
strength  30-32, and uniformity 81-83 sold for around 150 to 175 points off ICE March futures, same terms as above. 
..
Similar lots containing color 32 and better traded at around 200 points off ICE March futures, same terms as above. 
..
A moderate volume of color mostly 41 and 42, leaf 3 and 4, staple 35-37, mike 43-49, strength 27-29, 
and uniformity 79-81 sold for around 250 points off ICE March futures, same terms as above. 
..
Mixed lots containing color mostly 31 and 41, leaf 3 and 4, staple 35-37, mike 43-49, strength 29-32, 
and uniformity 80-82 sold for around 150 points off ICE March futures, FOB car/truck 
(Rule 5, compression charges paid). 


South Central Markets Regional Summary


North Delta
 
Spot cotton trading was inactive.  Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were higher.  Trading of CCC-loan equities was slow. No forward 
contracting was reported. The on-going partial shutdown of the Federal Government has prevented 
cotton shipments since producers are unable to redeem cotton from the CCC-loan to fulfill contracts. 

Typical winter weather prevailed during the period. Low temperatures were in the 30s. High temperatures 
were in the 40s early in the week; a flow of warm, moist air pushed temperatures into the low 50s 
and brought more precipitation to the region.    Scattered rain showers brought less than 1 inch of 
rainfall to the region generally; however, up to 2 inches were reported in localized areas.  
Additional rainfall in the upper Midwest has caused river flood warnings to remain in effect for 
numerous counties in a multi-state area throughout the lower Mississippi River Valley.  
Low-lying roads and fields were flooded. The Dumas and Memphis Classing Offices each maintained one 
shift to accommodate the steady flow of samples from the few gins that continued to operate. 
Soft soils in some cases hindered the movement of modules from fields to the gin yard. 
 
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were higher.  Trading of CCC-loan equities was inactive. 
No forward contracting was reported. The on-going partial shutdown of the Federal Government 
has prevented cotton shipments since producers are unable to redeem cotton from the CCC-loan 
to fulfill contracts; no new sales were reported. 

Typical winter weather prevailed during the period. Low temperatures were in the 40s. 
High temperatures were in the 40s early in the week; a flow of warm, moist air pushed 
temperatures into the low 60s and brought rain showers to the region.    
A few rain showers brought less than 1 inch of rainfall to some areas; heavier amounts 
were reported in isolated areas.  Additional precipitation in the upper Midwest has 
caused river flood warnings to remain in effect for numerous counties in a multi-state 
area throughout the lower Mississippi River Valley.  Minor flooding was reported in 
some places.  The Rayville Classing Office was classing the few samples that continued 
to trickle in as the harvest season grinds to the end in Louisiana. 

Trading 
  
North Delta 
..
A light volume of CCC-loan equities traded for 12.00 cents per pound. 

South Delta 
..
No trading activity was reported. 


Southwestern Markets Regional Summary


East Texas 

Spot cotton trading was active.  Supplies and producer offerings were heavy.  Demand was moderate.        
Average local spot prices were higher.  Producer     interest in forward contracting was light.  
Trading of CCC-loan equities was slow.  Foreign inquiries were heavy.  Interest was best from 
Bangladesh, India, and Pakistan.  
     
Producers in the Rio Grande Valley were actively tilling the soil and preparing seed beds ahead of    
planting.  Fields were watered because of dry soil  conditions. Fertilizer was applied. Seed was 
booked and pre-plant meetings were held.  In the Upper Coast, final harvesting was stalled due to 
rainfall and soggy soil conditions.  Ginning neared the end.  Ginning continued in the Coastal Bend.  
Additional rainfall was received, which further delayed field activities. Some gins were temporarily 
closed in the Blackland Prairies (BLP) until producers are able to return to the fields. Dry conditions 
were needed to bring the season to a close in south Texas and in the BLP.  Wet, muddy conditions hampered 
harvesting and ginning progress in Kansas.  Harvesting was at a standstill.  Gins began to expand and 
add night crews.  Kansas cotton was around 60 percent harvested and 50 percent ginned, according to local 
sources.  Producers were encouraged looking toward the next crop because of good subsoil moisture.      
 
West Texas 

Spot cotton trading was active.  Supplies and producer offerings were heavy.  Demand was moderate.        
Average local spot prices were higher.  Producer interest in forward contracting was light.  
Trading of CCC-loan equities was slow.  Foreign inquiries were heavy.  Interest was best from Bangladesh, 
India, and Pakistan.  
     
Daytime highs were in the low 40s to upper 60s and overnight lows were in the low 20s to upper 30s.  
Some areas received light-to-moderate rainfall early in the reporting period.  Modules continued to be     
transported to the gin yards.  Pockets of acres remained unharvested, but most of the fields have been 
harvested.   Many gins have finalized operations and closed for the season.  Some gins were about six 
weeks away from finishing.  Fieldwork had begun and tillage was active.  Meetings were held that 
presented the latest technology for dryland and irrigated management.     

Trading 
 
East Texas 
..
In Texas, a mixed lot containing a heavy volume of mostly color 51, leaf 3 and 4, staple 36 and 37, 
mike  43-52, strength 25-30, and uniformity 76-79 sold for around 64.50 cents per pound, FOB warehouse (compression charges not paid). 
..
In Oklahoma, a light volume of mostly color 31, leaf 2 and 3, staple 36, mike 45-47, strength 27-30, 
and uniformity 77-79 sold for around 71.25 cents, FOB car/truck (compression charges not paid). 
..
A heavy volume of color 31 and 41, leaf 4 and better, staple 36 and 37, mike 44-49, strength 28-33,        
uniformity 79-83, and 25 percent extraneous matter sold for around 68.00 cents, same terms as above.    
..
In Kansas, a light volume of mostly color 41, leaf 3 and 4, staple 35 and 36, mike 38-43, strength 28-29, 
uniformity 80-81, and 50 percent extraneous matter sold for around 65.00 cents, same terms as above.  
..
A light volume of CCC-loan equities traded for around 9.00 cents. 
 
West Texas 
..
A light volume of mostly color 31, leaf 2 and 3, staple 36 and 37, mike 39-42, strength 28-31, and          
uniformity 78-80 sold for around 68.50 cents per pound, FOB car/truck (compression charges not paid).   
..
A mixed lot containing a light volume of mostly color 41, leaf 3 and 4, staple 35 and 36, mike 38-43, 
strength 28-30, and uniformity 80-81 sold for around 65.00 cents, same terms as above.   
..
A light volume of color 31 and 32, leaf 3 and 4, staple mostly 33 and longer, mike 29-51, 
strength 28-30, and uniformity 78-80 sold for around 60.75 cents, same terms as above.   
..
A light volume of CCC-loan equities traded for 13.75 to 14.50 cents.  


Western Markets Regional Summary


Desert Southwest (DSW) 

Spot cotton trading was active.  Supplies and demand were moderate.   Producers continued to 
deliver previously contracted cotton to merchant and cooperative marketing pools.  
Average local spot prices were higher.  No forward contracting or domestic mill activity 
was reported.  Foreign mill inquiries were light.    
     
Daytime high temperatures were in the 60s for central Arizona.  Rain was received mid-week.  
Precipitation amounts ranged from one-tenth to   three-quarters of an inch.  
Foggy conditions were present in low-lying areas.  Higher elevations received snow in 
northern Arizona, which will help to increase reservoir capacity in late spring.  
Ginning continued uninterrupted.  Partly cloudy conditions kept daytime high temperatures 
in the 60s for New Mexico and El Paso, TX.  Wind advisories were in effect late in the 
period.  Ginning continued.  The Visalia Classing Office reached the milestone of      
50-million samples classed early in the reporting period.   
 
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 higher.  No forward contracting or domestic mill activity was reported.   
     
A rainy weather pattern settled into California in the period.  Precipitation totals 
measured from one-quarter of an inch in the south Valley to around three-quarters of an 
inch in the north Valley.   Improvements in snow levels were noted in the Sierra Nevada 
Mountain range.  The California Department of Water Resources reported the snow water 
equivalent average for the state increased to 50 percent of normal to date.  The storm 
entering southern California closed Interstate 5 at the Grapvine for several hours 
mid-week as ice and snow accumulated on the roads. Roller-ginning continued.  The Visalia 
Classing Office reached the milestone of 50-million samples classed early in the reporting period.   
 
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.    Interest was best from Japan.    
     
Daytime high temperatures were in the 60s in the Far West.  Weather systems brought 
rainfall and snow to the region.  Precipitation amounts ranged from one-tenth to 
three-quarters of an inch, with more on the way.  Snowfall was reported in higher 
elevations of Arizona, and California. The California Department of Water Resources 
reported the snow water equivalent average for the state increased to 50 percent 
of normal to date.  The Visalia Classing Office reached the milestone of 50-million 
samples classed early in the reporting period.   

Trading 
 
Desert Southwest 
..
In Arizona,  a moderate volume of color 21 and better, leaf 3 and better, staple 37 
and longer sold for around 250 points on ICE March futures, uncompressed, FOB warehouse.   
..
A heavy volume of color 31 and 41, leaf 4 and better, staple 36 and longer, mike 
averaging 4.7, strength  averaging 31.4, and uniformity averaging 81.3 sold for 
around 67.00 cents per pound, same terms as above.   
..
In New Mexico, a light volume of mostly color 41 and better, leaf 4 and better, 
and staple 38 sold for around 67.50 cents, FOB car/trucks (compression charges not paid).    

San Joaquin Valley 
..
No trading activity was reported. 
 
American Pima 
..
No trading activity was reported. 





 




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