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USDA - AMS: Weekly Cotton Market Review, narrative (2019-02-15)

USDA U.S. Department of Agriculture - February 15, 2019

 
 
Mp_cn206
February 15, 2019 
Weekly Cotton Market Review
 

Spot quotations averaged 261 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 66.07 cents per pound for the week ending 
Thursday, February 14, 2019. The weekly average was down from 68.68 last week 
and from 73.69 cents reported the corresponding period a year ago. Daily average 
quotations ranged from a high of 67.98 cents Friday, February 8 to a season low 
of 65.15 cents Wednesday, February 13. Spot transactions reported in the Daily 
Spot Cotton Quotations for the week ended February 14 totaled 25,185 bales. This 
compares to 50,215 reported last week and 54,051 spot transactions reported the 
corresponding week a year ago. Total spot transactions for the season were 
537,993 bales compared to 1,394,763 bales the corresponding week a year ago. 
The ICE May settlement prices ended the week at 71.71 cents, compared to 73.92 
cents last week. 



Southeastern Market Regional Summary
 
Spot cotton trading was slow.  Supplies and producer offerings were moderate. 
Demand was moderate.   Average local spot prices were lower. Trading of CCC-loan 
equities was inactive. Mostly cloudy and overcast conditions dominated the weather 
pattern across the lower Southeast during the period.  Daytime high temperatures 
varied from the upper 50s to mid-70s.  Heavy early morning fog was also present 
during the week.  Scattered showers brought around one-half of an inch to one inch 
of moisture to areas throughout central and north Alabama and north Georgia early 
in the week.  A line of severe thunderstorms moved across central and north Georgia 
on Tuesday bringing damaging wind that toppled trees and at least one EF-0 tornado 
associated with the storms was confirmed in     Clayton County, GA. No fieldwork was 
reported.  Unharvested cotton remained in low-lying areas where soggy conditions 
persisted.  Ginning was winding down; most gins had gone to gin days as they waited 
for backlogs of modules to build on gin yards.  The Macon Classing Office had a single 
shift operating as needed.  
     Sunny to cloudy conditions were observed across the Carolinas and Virginia 
throughout the week.  Daytime high temperatures varied from the mid-40s to the low 60s.  
Scattered shower activity brought light precipitation to portions of the upper 
Southeastern region early in the week.  Rainfall totals measured from trace amounts to 
around one-quarter of an inch of moisture.  No fieldwork was reported.  Ginning was nearing 
completion in the Carolinas and Virginia; some gins remained on gins days as they waited 
for the backlogs of modules to accumulate    on gin yards.  The Florence Classing Office 
had a single shift operating as needed.  Producers attended regional meetings and considered 
planting options for the 2019-crop season.   
 
Textile Mill 
Domestic mill buyers inquired for a moderate volume of 2019-crop cotton, color 41, leaf 4, 
and staple 34 for October through December delivery.  No sales were reported.  No additional 
inquiries were reported.  Most mills operated five to seven days. Yarn demand was moderate. 
     Demand through export channels was moderate.  Agents throughout the Far East inquired 
for any discounted styles of cotton.  

Trading 

...A light volume of mostly color 41, leaf 3 and 4, staple 36 and 37, mike 37-42, strength 27-29, 
and uniformity  80-83 sold for around 1`75 points off ICE MArch futures, 
FOB car/truck, Georgia terms (Rule 5, compression charges apid, 30 days free storage).. 

...A moderate volume mixed lot containing color mostly 51, leaf 3-5, staple 35-37, mike 37-49, 
strength 27-29, uniformity 79-82, and containing approximately 50 percent extraneous matter 
sold for around 900 points off ICE March futures, same terms as above.

...A light volume of color 42, leaf 3 and 4, staple 32 and 33, mike 40-42, strength 23-26, 
and uniformity 77-79 sold for around 50.00 cents per pound, same terms as above.


South Central Markets Regional Summary 

North Delta 
Spot cotton trading was slow.  Supplies and demand of available cotton was light.  Average local 
spot prices were lower.  Trading of CCC-loan equities was inactive. No forward contracting was 
reported; no new sales were reported. Producers were carefully watching ICE cotton futures prices; 
the current March 2019 contract dropped by nearly 2 cents, which was partly attributed to the 
release of the National Cotton Council’s producer survey.  The report indicated that as many as 
22.5 million bales could be harvested in 2019. On-going trade negotiations with China, among other 
political events, were also seen as factors to lower prices.   
A cold front early in the week brought overnight temperatures in the 20s.  More rain showers 
continued to dominate the weather pattern during the week.  Daytime highs were in the 40s to 60s.  
The Memphis territory received about 3 inches of rain and flood warnings were in effect throughout 
the region.  Both the Dumas and Memphis Classing Offices were working as necessary as sample receipts 
slowed to a trickle.  A few gins remained in operation because wet weather and soft soils have hampered 
the timely retrieval of modules still in the field.  Producers attended regional industry meetings to 
stay current with new technologies and other issues affecting the agricultural community.  No fieldwork 
was reported. 

South Delta 
Spot cotton trading was inactive.  Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were lower.  Trading of CCC-loan equities was inactive. No forward contracting
was reported; no new sales were reported. Producers were carefully watching ICE cotton futures prices; 
the current March 2019 contract dropped by nearly 2 cents, which was partly attributed to the release 
of the National Cotton Council’s producer survey.  The report indicated that as many as 22.5 million 
bales could be harvested in 2019.  On-going trade negotiations with China, among other political 
events, were also seen as factors to lower prices.  

A cold front early in the week brought overnight temperatures in the 20s.  More rain showers 
continued to dominate the weather pattern during the week.  Daytime highs were in the 40s to 60s.  
Rain showers brought nearly 3 inches of precipitation to most areas; river flood warnings remained 
in effect for parts of Louisiana. Producers attended regional industry meetings to stay current with 
new technologies and other issues affecting the agricultural community.  No fieldwork was reported 
due to wet conditions. 


Trading 
  
North Delta 
..A light volume of mostly color 43, leaf 3 and 4, staple 35-37, mike 49-56, strength 28-33, and uniformity  
80-84 traded for around 53.00 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 active.  Supplies and producer offerings were moderate.  Demand was moderate.  
Producers continued to deliver previously contracted cotton to merchant and cooperative marketing pools.  
Average local spot prices were lower.  Producer interest in forward contracting was light.  Trading of 
CCC-loan equities was slow.  Foreign inquiries were light-to-moderate. Interest was best from Mexico, 
Pakistan, and Turkey.      
     Initial planting in dryland fields was reported in the Rio Grande Valley.  Most waited for the soil 
temperatures to reach optimal levels ahead of planting.  Producers were encouraged with fall rains that 
had built good subsoil moisture.  Most fields in the Coastal Bend were too soggy to support equipment.  
Local reports indicated that some producers decided to move from planting corn to cotton.  Some fields in 
south Texas were prepped for planting.  Ginning continued in the Winter Garden area.  Pockets of light, 
wintry precipitation and rainfall were received early in the reporting period in the northern Blackland 
Prairies.  A few fields were plowed and fertilized.  Some cotton was harvested during periodic warmer 
conditions.  Kansas producers were able to resume harvesting as soils began to firm enough to support 
equipoment.  Gins continued processing modules without interruption.  Producers attended growers meetings 
and booked seed for the 2019-crop.   
 
West Texas 

Spot cotton trading was active.  Supplies and producer offerings were moderate.  Demand was moderate.  
Producers continued to deliver previously contracted cotton to merchant and cooperative marketing pools.  
Producers monitored the market closely to determine in what way to market the remainder of their crop.  
Average local spot prices were lower.  Producer interest in forward contracting was light.  Trading of 
CCC-loan equities was slow.  Foreign inquiries were light to moderate.  Interest was best from Mexico, Pakistan, and Turkey.      
     Blowing conditions depleted the soil moisture with daytime high temperatures in the mid-30s to low
 80s, and overnight lows in the teens to low 50s.  Approximately 28 gins continued submitting samples 
for grading services to the Abilene, Lamesa, and Lubbock Classing Offices.  Producers were actively 
shredding stalks, applying herbicide, fertilizer, and compost.  Local producer meetings were attended.             

Trading 

East Texas 
..In Oklahoma, a light volume of color 31, leaf 3 and 4, staple 35 and 36, mike 42-46, strength 31-33, 
and uniformity 80-82 sold for around 68.00 cents per pound, FOB car/truck (compression charges not paid). 

..A moderate volume of mostly color 21, leaf 2, 3, and 4, staple 39 and 40, mike 29-33, strength 31-33, and 
uniformity 79-82 sold for around 63.00 cents, same terms as above.  

..A light volume of mostly color 31 and 41, leaf 3, staple 35 and 36, mike averaging 50.5, strength averaging 
31.2, and uniformity averaging 80.7 sold for around 61.75 cents, same terms as above.  

..A moderate volume of CCC-loan equities traded for around 4.00 cents. 


 
West Texas 
..A moderate volume of mostly color 31 and 41, leaf 3, 4, and 5, staple 37 and longer, mike 40-51, strength 
30-33, and uniformity 80-82 sold for around 65.25 cents per pound, FOB car/truck (compression charges not paid).   

..A moderate volume of color 31, leaf 5 and better, staple 37 and 38, mike 31-35, strength 31-32, uniformity 
79-80, and 50 percent extraneous matter sold for around 59.00 cents, same terms as above.   

..A mixed lot containing a light volume of mostly color 32, leaf 3 and 4, staple 35 and 36, mike 27-43, strength 
27-34, uniformity 78-82,  and 25 percent extraneous matter sold for around 52.50 cents, same terms as above.   

..A light volume of CCC-loan equities traded for around 4.75 cents. 


Western Markets Regional Summary 

Desert Southwest (DSW)
 
Spot cotton trading was active.  Supplies were moderate.  Demand was light.     Average local spot prices were lower.  
No forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light.  The on-going 
trade/tariff dispute between the US and China have kept most mills on the sidelines.   
     Daytime high temperatures were mostly in the high 60s.  Flood watches were in effect for most of Arizona as 
rain moved through the area late in the period.  Approximately one-quarter of an inch of moisture was received, 
but more was expected.  Fields were ready for initial planting to begin in Yuma, Arizona.  Ginning continued in 
Arizona and El Paso, TX.  Industry representatives were supportive of the reported Far West planting intentions 
released by the NCC.  However, some producers in eastern New Mexico could be cutting back on planting cotton due 
to a declining labor force, as more of the labor pool goes into the oil industry.  Limited irrigation water supplies 
will decrease acreage in El Paso, Texas.   The Visalia Classing Office will celebrate 50 million bales classed at an 
open house on Wednesday, February 20 from 10:00 am to 2:00 pm. 
 
San Joaquin Valley (SJV) 
Spot cotton trading was inactive.  Supplies and demand were light.    Average local spot prices were lower.  No 
forward contracting or domestic mill activity was reported.  Foreign mill inquiries were light.  The on-going 
trade/tariff dispute between the US and China continues to keep most mills on the sidelines.   
     Weekly shower activity and strong winds continued for the Valley.  Precipitation amounts ranged from one-half 
of an inch to 2 inches.    Some reservoirs reached capacity, and the Bureau of Reclamation began releasing water to 
some contractors, to prevent flooding.  Heavy snowfall was received in the Sierra Nevada Mountain range.  The statewide 
snowpack averaged 96 percent of the April 1 average.  The statewide snowpack water equivalent is estimated to be around 
27 inches.  Wind advisories remained in effect.  The World Ag Expo in Tulare, with nearly 1,500 exhibitors, concluded 
its three-day run on February 14.  Industry representatives were supportive of the reported Far West planting intentions 
released by NCC.  The Visalia Classing Office will celebrate 50 million bales classed at an open house on Wednesday, 
February 20 from 10:00 am to 2:00 pm. 
 
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.  The on-going 
trade/tariff dispute between the US and China continued to keep some mills on the sidelines.  Competition with Egyptian 
ELS cotton put pressure on US prices.  Interest was best for any discounted qualities and for nearby shipment.     
     Daytime high temperatures were in the mid-50s to mid-60s in the Far West.  Snow was received in higher elevations 
of Arizona and California.  In the Sierra Nevada Mountain range of California, the statewide snowpack averaged 96 
percent of the April 1 average.  Precipitation amounts ranged from       one-quarter of an inch to 2 inches for the 
region.  The San Joaquin Valley reservoir storage capacity received a healthy increase with recent rains. Fields 
were ready for initial planting to begin in Yuma, Arizona.  Ginning continued in the region.  Industry representatives 
were supportive of the reported Far West planting intentions released by NCC.  Local contacts noted some acreage 
decline in Yuma, Arizona and El Paso, Texas.   Ginning continued.  The Visalia Classing Office will celebrate 50 million 
bales classed at an open house on Wednesday, February 20 from 10:00 am to 2:00 pm. 


Trading 
 
Desert Southwest 

..A moderate volume of mostly color 31, leaf 3 and better, staple 37 and longer sold for around 250 to 300 points on 
ICE March futures, uncompressed, FOB warehouse.  

..A moderate volume of mostly color 41, leaf 4 and better, and staple 37 and longer sold for around 500 to 600 points 
off ICE March futures, same terms as above.   

 
San Joaquin Valley 
..No trading activity was reported. 

 
American Pima 
..No trading activity was reported. 



USDA ANNOUNCES SPECIAL IMPORT QUOTA #17 
FOR UPLAND COTTON 
February 14, 2019 


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 February 14, 2019, allowing importation of 12,619,815 kilograms (57,962 bales) of upland cotton.  
     Quota number 17 will be established as of February 21, 2019, and will apply to upland cotton purchased not 
later than May 21, 2019, and entered into the U.S. not later than August 19, 2019. The quota is equivalent to one 
week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 
2018 through December 2018, 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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