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USDA - AMS: Weekly Cotton Market Review, narrative (2019-04-19)

USDA U.S. Department of Agriculture - April 19, 2019


 

Mp_cn812  
April 19, 2019 
Weekly Cotton Market Review  


Average spot quotations were 10 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 72.61 cents per pound for the week ending 
Thursday, April 18, 2019. The weekly average was up from 72.51 last week, but down from 79.22 
cents reported the corresponding period a year ago. Daily average quotations ranged from a 
low of 71.03 cents Monday, April 15 to a high of 73.50 cents Wednesday, April 17. Spot transactions 
reported in the Daily Spot Cotton Quotations for the week ended April 18 totaled 27,298 bales. 
This compares to 47,424 reported last week and 44,912 spot transactions reported the corresponding 
week a year ago. Total spot transactions for the season were 1,100,173 bales compared to 1,816,728 
bales the corresponding week a year ago. The ICE July settlement prices ended the week at 78.27
cents, compared to 77.74 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 steady. Trading of CCC-loan equities was inactive. 
     
Partly cloudy to fair conditions prevailed across Alabama, the Florida Panhandle, and 
Georgia during the period.  Daytime high temperatures were in the low 70s to low 80s during 
the week.  A line of severe thunderstorms moved across the region and brought moisture to 
areas across the lower Southeastern region over the weekend.  Strong winds accompanied the 
storms and toppled trees, downed powerlines, and damaged homes.  Precipitation totals measured 
from one-quarter of an inch in portions of south Georgia and the Florida panhandle to around 
one-half of an inch in south Alabama.  Heavier accumulations of 1 to 2 inches were observed 
in areas of north Alabama.  The rain improved soil moisture conditions in areas of central 
and coastal Georgia and southwestern Alabama where abnormally dry to moderate drought 
conditions existed, according to the U.S. Drought Monitor.  Planting had begun in some areas.  
Field preparation continued in between rain events during the week.   
    
A mix of cloudy to sunny conditions prevailed across the upper Southeastern region during 
the period.  Daytime high temperatures were in the low 70s to low 80s.  Widespread 
thunderstorms brought moisture to areas throughout the Carolinas and Virginia. Weekly 
accumulated precipitation totals measured from around one-quarter of an inch in central 
South Carolina to around one inch in areas of central North Carolina and Virginia.  
Fieldwork continued in South Carolina where producers applied burndown and fertilizer 
in preparation for planting.  Fieldwork was limited in North Carolina where soils remain 
saturated from heavy rainfall in recent weeks.  In Virginia, fertilizer and burndown 
applications were underway in some fields, but many areas remain too saturated to support equipment. 
 
Textile Mill 

Domestic mill buyers inquired for a moderate volume of 2019-crop cotton, color 41, leaf 4, 
and staple 35 and longer for fourth quarter delivery.  No sales were reported.  No additional 
inquiries were reported; most mills had covered their immediate-to-nearby raw cotton needs.  
Most mills operated five to seven days. 
     
Demand through export channels was moderate.  Demand was good throughout the Far East 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 steady.  Trading of CCC-loan equities was inactive. 
Producers took advantage of higher ICE futures prices to forward contract a moderate 
volume of 2019-crop cotton.   

Severe weather struck the region early in the reporting period.  Structural damage to 
buildings and equipment from straight line winds and hail was reported in many places.  
Up to 3 inches of moisture fell generally, with some areas reporting as much as 4 inches of 
precipitation. Clear skies and daytime temperatures in the 60s and 70s followed.  Overnight 
temperatures in the low 40s were unseasonably low.  Soils remained saturated due to the 
additional precipitation; outdoor activities were delayed.  River flood warnings remained 
in effect for the Mississippi River and several of its tributaries.  Producers continued 
to make plans and prepare for the upcoming planning season. Severe thunderstorms swept 
across the region late in the period producing damaging wind and moderate rainfall. 
 
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light.  
Average local spot prices were steady.  Trading of CCC-loan equities was inactive. 
Producers took advantage of higher ICE futures prices to forward contract a moderate 
volume of 2019-crop cotton. 

Severe weather pounded the region early in the reporting period.  A line of tornadoes 
wreaked havoc from Louisiana through northeastern Mississippi.  Structural damage from 
tornadoes, straight line winds, and hail was reported in many places; the town of 
Hamilton, MS was severely damaged; fortunately, no deaths were reported in this region.  
Most areas reported 3 inches of rain generally, with localized places receiving higher 
amounts in isolated areas. Daytime temperatures were in the 70s.  Overnight lows dropped 
into the 40s behind the low pressure front.  Soils remained saturated due to the 
additional precipitation; outdoor activities were delayed.  River flood warnings remained 
in effect for the Mississippi River and several of its tributaries.  Producers continued 
to make plans and prepare for the upcoming planning season. Severe thunderstorms swept 
across the region late in the period producing damaging wind and moderate rainfall. 

Trading 
  
North Delta 
..
Producers booked a moderate volume of 2019-crop cotton for 16.00 to 18.00 cents per pound. 

South Delta 
..
Producers booked a moderate volume of 2019-crop cotton for 16.00 to 18.00 cents per pound. 


Southwestern Markets Regional Summary      .


East Texas 

Spot cotton trading was active.  Supplies and producer offerings were moderate.  Demand was 
moderate.  Average local spot prices were steady.  Producer interest in forward contracting 
was light.  Trading of CCC-loan equities was active.  Foreign inquiries were moderate.  
Inquiries were best from Bangladesh, Vietnam, and Turkey. 
     
Planting in Texas was 11 percent completed compared to 9 percent last week, and 10 percent for 
the five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop 
Progress report released on April 15.  In the Rio Grande Valley, planting was completed, but 
replanting was in progress.  Irrigation water was applied. Beneficial rainfall was welcomed 
throughout the reporting period.   Some areas received hail and up to 7 inches of precipitation 
that caused localized flooding.  In south Texas, beneficial precipitation was received.  
Planting continued.  In the Blackland Prairies, cotton planting was underway in some areas, 
according to local reports.  Fieldwork was at a standstill in other areas, due to soggy field 
conditions.  Additional rainfall was received when a severe storm entered the region on April 17.  
In Kansas, ginning continued and fieldwork was active. Fertilizer was applied.  Modules were 
transported from fields to the gin yards.  Soil temperatures were too cool to encourage planting.  
Topsoil and subsoil moisture was rated mostly adequate to surplus, according to NASS.  In 
Oklahoma, planting was at 3 percent, up 3 points from the previous year and up 2 points compared 
to the five-year average, according to NASS.  Planting has not expanded, as most  producers are 
waiting for soil temperatures to move closer to 65 degrees.  Daytime temperature highs were in 
the low 50s to mid-80s.  Overnight lows in Oklahoma were in the mid-30s to upper 50s.  Rainfall 
was received early in the reporting period, which will help soil moisture levels ahead of planting.     
 
West Texas 

Spot cotton trading was moderate.  Supplies and producer offerings were moderate.  Demand was 
moderate.  Average local spot prices were steady.  Producer interest in forward contracting was 
light.  Trading of CCC-loan equities was active.  Foreign inquiries were moderate.  Inquiries were 
best from Bangladesh, Vietnam, and Turkey.   
     
Daytime high temperatures were in the mid-40s to mid-80s, and overnight lows were in the low 30s 
to mid-50s.    Widespread rainfall was received on April 13, which brought traces to more than four 
and three-fourths inches of beneficial precipitation. Late in the reporting period, a severe storm 
brought rainfall and hail to the Panhandle and Rolling Plains.   Optimism was high regarding the 
non-drought status, and many were enthused about planting dryland acreage, according to local sources.  
Fertilizer has been applied to dryland and irrigated acres.  Soil temperatures were not optimal for 
planting at this time.  Cover crops were terminated.  
 
Trading 
 
East Texas 
..
In Texas, a mixed lot containing a light volume of mostly color 62 and 63, leaf 4 and 5, staple 34, mike 
averaging 46.3, strength averaging 26.3, uniformity averaging 78.5, and 25 percent extraneous matter 
sold for around 53.25 cents per pound, FOB warehouse (compression charges not paid). 
..
In Oklahoma, a mixed lot containing a moderate volume of mostly color 41, leaf 4, staple 35, mike 38-47, 
strength 27-31, and uniformity 77-82 sold for around 68.25 cents, FOB car/truck (compression charges not paid). 
..
In Kansas, a heavy volume of mostly color 22, 32, and 42, leaf 3 and 4, staple 35, mike averaging 40.9, 
strength 26-31, uniformity 78-82, and 25 percent extraneous matter sold for around 68.50 cents, same terms as above.  
..
A heavy volume of CCC-loan equities traded for 9.75 to 16.25 cents.  
 
West Texas 
..
A heavy volume of mostly color 32 and 42, leaf 3 and 4, staple 36 and longer, mike 35-51, strength 26-34, 
uniformity 77-83, and 25 percent extraneous matter sold for around 69.25 cents per pound, FOB car/truck 
(compression charges not paid).   
..
A mixed lot containing a heavy volume of mostly color 31, 41, and 42, leaf 3 and better, staple 32 and 33, 
mike 39-52, strength 23-31, and uniformity 75-81 sold for around 66.50 cents, same terms as above.   
..
A moderate volume of color 41 and 51, leaf 4, staple 34 and 35, mike 22-50, strength 27-30, uniformity   
79-81, and 100 percent extraneous matter sold for around 66.00 cents, same terms as above.   
..
A heavy volume of CCC-loan equities traded for 8.25 to 15.50 cents. 


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies and demand were moderate.  Average local prices were 
steady.  No forward contracting or domestic mill activity was reported.   Foreign mill inquiries 
were light to moderate.     

Central Arizona daytime high temperatures were in the mid-70s to upper 80s, and overnight lows 
were in the upper 50s to mid-60s.  Planting neared completion in Yuma, but expanded in Safford 
Valley.  A beneficial, gentle rainfall was received in Yuma County.  Local reports indicated 
that 80 percent of the stands had emerged.  Planting was delayed in some fields, due to the 
vegetable harvest.  Planting had begun in the Safford area where weather had delayed field 
activities.  Stands emerged and were established in Maricopa and Buckeye.  Irrigation was 
underway. Planting was 30 percent completed compared to 39 percent for the five-year average, 
according to the National Agricultural Statistics Service’s (NASS) Crop Progress and Condition 
report released on April 15.  Planting was ongoing in El Paso, TX.  Some producers opted to 
wait until May to initiate sowing activities with short season varieties to minimize water needs.   
In New Mexico, pre-watering was in progress.  Planting was expected to begin the week of 
April 22.  Equipment repairs and maintenance were underway in the gins.  Cotton planted was 2 
percent done in New Mexico, compared to 16 percent for the five-year average, according to NASS.     
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light.  Average local prices were 
steady.  No forward contracting or domestic mill activity was reported.   Foreign mill inquiries were light.    
     
In Visalia, daytime high temperatures were in the high 60s to low mid-80s, and overnight lows 
were in the high 50s to low 60s.  Planting neared completion, and irrigation was applied. 
Emergence was widespread.  Light rainfall was received the morning of April 16, but the sun dried fields quickly. 
 
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 moderate.  Interest was best from China, India, and Pakistan.    
     
Planting advanced in the Safford area.  Stands had emerged and irrigation water was applied in 
some parts of central Arizona.  Acreage was down, due to low market prices in Yuma County, according 
to local sources.  A widespread rain brought beneficial precipitation to most areas.  In the San 
Joaquin Valley, planting neared completion and irrigation was applied.  Emergence was widespread.  
El Paso area producers made decisions on how best to use irrigation water, which resulted in a 
reduction of planted acres.  Some will use their water allocation toward other crops, such as pecan 
orchards, and not plant AP.  Planting had begun, but some producers opted to plant shorter season 
varieties in May to resourcefully use the water allocation.    Planting was expected to begin the 
week of April 22 in New Mexico.  Fertilizer was applied.   

Trading 
 
Desert Southwest 
..
No trading activity was reported. 

San Joaquin Valley 
..
No trading activity was reported. 

American Pima 
..
No trading activity was reported. 


2019 CCC Loan Rate Differentials 


USDA’s Commodity Credit Corporation announced the 2019-crop loan rate differentials for upland and extra-long staple cotton. 
      T
he differentials, also referred to as loan rate premiums and discounts, have been calculated based on market 
valuations of various cotton quality factors for the prior three years. This calculation procedure is identical 
to that used in past years, with two exceptions. One, there is a reduced discount applied to color white, leaf 8 
upland cotton, and the addition of a new plastic extraneous matter category for upland cotton. Two, the ranges for 
extra-long staple strength discounts have changed from prior years. 
     
The 2019-crop differential schedules are applied to 2019-crop loan rates of 52.00 cents per pound for the base grade 
of upland cotton and 95.00 cents per pound for extra-long staple cotton. The 2018 Farm Bill stipulates that the 
upland cotton loan rate range between 45-52 cents per pound based on the simple average of the Adjusted World Price 
for the two marketing years preceding sowing of the ensuing year’s crop. The loan rate provided to an individual cotton 
bale is based on the quality of each individual bale as determined by USDA’s Agricultural Marketing Service classing measurements. 
     
The Commodity Credit Corporation adjusts cotton loan rates by these differentials so that cotton loan values reflect 
the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and 
strength. Click here to view the 2019-crop loan rate differentials.  


USDA ANNOUNCES SPECIAL IMPORT QUOTA #26 
FOR UPLAND COTTON 
April 18, 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 April 25, 2019, allowing importation of 12,157,032 kilograms (55,836 bales) of upland cotton.  
     
Quota number 26 will be established as of April 25, 2019, and will apply to upland cotton purchased not later 
than July 23, 2019, and entered into the U.S. not later than October 21, 2019. The quota is equivalent to 
one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period 
December 2018 through February 2019, 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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