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USDA - AMS: Weekly Cotton Market Review, narrative (2019-05-31)

USDA U.S. Department of Agriculture - May 31, 2019

   
Mp_cn812 
May 31, 2019 
Weekly Cotton Market Review 



Spot quotations averaged 201 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 63.56 cents per pound 
for the week ending Thursday, May 30, 2019. The weekly average was up from 
61.55 last week, but down from 87.17 cents reported the corresponding 
period a year ago. Daily average quotations ranged from a low of 62.85 cents 
Friday, May 24 to a high of 63.93 cents Tuesday, May 28. Spot transactions 
reported in the Daily Spot Cotton Quotations for the week ended May 30 totaled 
8,237 bales. This compares to 12,871 reported last week and 29,269 spot 
transactions reported the corresponding week a year ago. Total spot transactions 
for the season were 1,185,338 bales compared to 2,010,396 bales the corresponding 
week a year ago. The ICE July settlement prices ended the week at 69.34 cents, 
compared to 67.48 cents last week. 

 
Southeastern Markets Regional Summary 


Spot cotton trading was inactive.  Supplies and producer offerings were light.  
Demand was light.  Average local spot prices were higher. Trading of CCC-loan 
equities was inactive. 
     
Unseasonably hot and dry conditions prevailed over the lower Southeastern region 
during the period.  Daytime high temperatures were in the 90s and touched the low 
100s at some locations over the weekend.  A dome of high pressure, which settled over 
the Southeastern region, has resulted in temperatures that tied or established new 
record highs for May in Atlantic coastal areas from Florida to North Carolina.  
Planting activity and fieldwork advanced at a rapid pace without interruption.  
However, planting on dryland acreage was halted in some areas of Alabama and Georgia 
as producers waited for a timely rainfall to replenish soil moisture, which was rapidly 
deteriorating under the hot and dry weather.  Center pivots were running full schedules 
and irrigated cotton progressed well.  A timely rainfall is needed to enhance germination 
and invigorate seedlings on dryland acreage.  According to the National Agricultural 
Statistic Service’s (NASS) Crop Progress report released May 28, cotton planted was ahead 
of the five-year average in Alabama at 88 percent and also in Georgia at 76 percent planted.     
     
Similar hot and dry conditions were observed across the Carolinas and Virginia during the 
period.  Daytime high temperatures were in the 90s and reached the low 100s at some locations.  
In Charleston, S.C., it was the earliest instance reaching 100 degrees on record. Planting 
advanced, but was delayed in some areas of the Carolinas due to deteriorating soil moisture 
conditions. Some producers halted fieldwork to conserve soil moisture.  A timely rainfall is 
needed to replenish soil moisture and invigorate seedlings.  Producers in southeast Virginia 
reported increasing pressure from Amaranthus (Pigweed) in some fields. According to NASS, 
in South Carolina cotton planted reached 90 percent, Virginia 84, and in North Carolina 
74 percent planted. 
 
Textile Mill 

Domestic mill buyers inquired for a heavy volume of 2019 and 2020-crop cotton, color 41, 
leaf 4, and staple 34 and longer for fourth quarter 2019 through second quarter 2021 delivery.  
No sales were reported.  No additional inquiries or purchases were reported; reports indicated 
most mills have covered their raw cotton needs through the fourth quarter 2019.  
     
Demand through export channels was good as ICE futures trended lower.  Agents for mills in 
Taiwan purchased a moderate volume of color 42 and 43, leaf 5 and 6, and staple 36 and longer for 
August shipment.  Agents for mills in India inquired for a moderate volume of color 41, leaf 4, 
and staple 36 for nearby shipment.  Demand was good throughout the Far East for any recaps 
containing discounted styles of cotton. 

Trading 
..
A light volume of color 41 and better, leaf 5 and better, staple 35 and longer, mike 43-49, 
strength 27-30, and uniformity 80-83 sold for around 225 points on ICE July futures, FOB car/truck 
(Rule 5, compression charges paid). 


South Central Markets Regional Summary


North Delta
 
Spot cotton trading was slow.  Supplies of available cotton and demand were light.  Average 
local spot prices were higher.  Trading of CCC-loan equities was inactive. No forward 
contracting was reported.   

A mix of sunny to partly cloudy conditions dominated the weather pattern during the period.  
Daytime high temperatures were in the mid-80s to low 90s.  Overnight lows were in the mid-60s 
to low 70s.  The hot and dry conditions allowed planting activity and fieldwork to advance at 
a good pace.  Producers applied fertilizer and herbicide to fields.  Field activities were 
interrupted late in the period as an unwelcome storm system moved across the region.  
Precipitation totals measured around one-half of an inch to three-quarters of an inch of 
moisture.  National Weather Service river flood advisories and warnings continued for 
counties in the Bootheel of Missouri and throughout the Mississippi River basin, as moderate 
flooding has occurred and major flooding is in the nearby forecast.  Some low-lying fields 
remained too soft to support equipment.  According to the National Agricultural Statistics 
Service’s Crop Progress report released May 28, planting had reached 81 percent in Arkansas, 
75 in Tennessee, and 51 percent in Missouri; all figures lagged behind the five-year average. 
 
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.       

Fair to mostly cloudy conditions were observed across the region during the period.  
Daytime high temperatures were in the upper 80s to low 90s.  Overnight lows were in the upper 
60s to low 70s.  The dry conditions allowed planting and fieldwork to advance at a rapid pace.  
Producers applied fertilizer and herbicide to fields.  According to the National Agricultural 
Statistics Service’s Crop Progress report released May 28, planting had reached 84 percent in 
Louisiana and 62 in Mississippi; both figures behind the five-year average.  National Weather 
Service river flood warnings continued for parishes along the Mississippi River basin as moderate 
flooding has occurred and is forecast in the days ahead.  The U.S. Army Corps of Engineers 
announced a slow open of the Morganza Spillway will begin on June 2 to minimize stress on the 
levee reaches.  Producers who farm the levee system were busy removing equipment and temporary structures.   

Trading 
  
North Delta 
..
A moderate volume of color 41 and better, leaf 5 and better, staple 35 and longer, mike 43-49, 
strength 27-30, and uniformity 80-83 sold for around 225 points on ICE July futures, 
FOB car/truck (Rule 5, compression charges paid). 

South Delta 
..
A light volume of color 41 and better, leaf 5 and better, staple 35 and longer, mike 43-49, strength      
27-30, and uniformity 80-83 sold for around 225 points on ICE July futures, FOB car/truck (Rule 5, compression charges paid). 


Southwestern Markets Regional Summary      .


East Texas 

Spot cotton trading was slow.  Supplies and producer offerings were moderate.  Demand was moderate.  
Average local spot prices were higher. Trading of CCC-loan equities was inactive.  Foreign mill 
inquiries were light-to-moderate.  Interest was best from China, India, and Pakistan for 2019-crop cotton.  
Oklahoma and Kansas warehouse shipping activity was brisk.  
      
Overall, the crop made good progress in the Rio Grande Valley, Coastal Bend, Upper Coast, and Blackland 
Prairies.  Local sources reported some Coastal Bend fields were needing some rain as windy conditions 
persisted and depleted topsoil moisture.  From the Coastal Bend to Rio Grande Valley, fields progressed 
to squaring, initial blooming, and mid-bloom stage.  Insect pressures were light and easily controlled.  
Producers sprayed for aphids and fleahoppers.  Weather continues to have an impact on planting in Kansas.  
Severe weather with torrential rainfall and tornado threats hit the cotton-growing areas of Kansas all week.  
Rainfall amounts varied from one-half of an inch in western Kansas to nearly four inches in eastern Kansas.  
Fields were water-logged and flooded in eastern Kansas.  Some fields that were planted in-between rain 
events have not germinated.  Some seed rot was reported.  Sources reported less than 50 percent of 
the crop was planted in Kansas.  Planting deadlines are June 1.  Kansas will be hard pressed to meet 
the prospective planting expectations of 170,000 acres as reported by the National Agricultural Statistics 
Service.  Some producers were looking into planting corn if unable to get cotton in the ground.  
Ginning continued.  The crop made good progress in Oklahoma.  Local sources estimated planting was 50 
percent completed.  Some replanting was done in areas hit heavy by rains and hail.  The Oklahoma Boll 
Weevil Eradication Organization reminded producers that harvesting equipment coming from two eradication 
areas in Texas (Lower Rio Grande Valley eradication zone and East Texas maintenance area) has to be 
certified as boll weevil free prior to moving into the state.  The equipment must be inspected and a 
USDA-APHIS phytosanitary certificate issued before equipment can be transported from these areas.  
The combined effort continues to help keep the boll weevil from re-emerging in Oklahoma.    
 
West Texas 

Spot cotton trading was inactive.  Supplies and producer offerings were light.  Demand was moderate.  
Producer interest in new-crop contracting was light as ICE December futures remained under 70 cents.  
No domestic mill activity was reported.  Average local spot prices were higher.  Trading of CCC-loan     
equities was inactive.  Foreign mill inquiries were light-to-moderate.  Local merchants reported some 
mill business slowed as July ICE futures remained steady at 68.00 cents and Ramadan holiday festivities.   
A few new sales were reported.  Interest was best from Bangladesh and India for 2018-crop cotton.  
Premium quality lots of 2018-crop cotton were limited.  Inquiries for 2019-crop cotton were light.  
Interest was best from China, India, and Pakistan.    
     
Daytime high temperatures were mostly in the high 70s to 80s.  Rainfall accumulations were around two 
and one-half inches for the week.  Planting was active around Lamesa and Lubbock areas.  Some cotton was 
up and development varied.  Progress was slowed by cool and wet conditions.  Some seed was washed away 
after heavy rains moved through the area early in the period.  Sources reported the Texas Panhandle 
was hit by cool temperatures and hail.  Some producers may use preventative planting measures for cotton 
and plant acreage to corn, since  corn prices have re-bounded and it’s too late to replant cotton.   
Rainfall kept fields wet in the Rolling Plains, which delayed planting.   

Trading 
 
East Texas 
..
In Kansas, a moderate volume mixed lot of mostly color 41 and 42, leaf 5 and better, staple 36-38, 
mike averaging 39.5, strength averaging 29.5, uniformity averaging 81.0, with 55 percent bark sold 
for around 58.00 cents per pound, FOB car/truck (compression charges not paid). 
..
In Oklahoma, a light volume of color 31 and 32, leaf 4-6, staple 34-36, mike averaging 32.0, strength 
averaging 28.0, and uniformity averaging 78.3 sold for around 55.00 cents, same terms as above.    
..
A light volume mixed lot of color mostly 53, leaf 5-7, staple 34-36, mike averaging 45.9, strength 
averaging 30.5, uniformity averaging 80.0, with 50 percent bark sold for around 44.25 cents, same terms as above.   

West Texas 
..
A moderate volume mixed lot of mostly color 41 and 42, leaf 5 and better, staple 36-38, mike averaging 
39.5, strength averaging 29.5, uniformity averaging 81.0, with 55 percent bark sold for around 58.00 cents 
per pound, FOB car/truck (compression charges not paid). 
..
Similar lots containing staple 35, with no extraneous matter sold for around 58.00 cents, same terms as above.   


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies and demand were light.    Average local spot prices 
were higher.  No forward contracting or domestic mill activity was reported.  Foreign mill 
inquiries were light.     
     
Arizona temperatures returned to near normal for this time of year.  Daytime highs were in the 
80s and 90s.  Springs rains contributed to an increase of weeds. Safford area producers were 
combating false chinch bugs as they move in from drying weeds near fields.  The Arizona crop made 
good progress, but was slightly late, due to cool temperatures.  Unseasonably cool weather and 
windy conditions slowed progress in New Mexico and El Paso, TX.  Local sources reported that 
some New Mexico fields received a battering from strong winds, so the crop looks a little rough.  
The El Paso, TX crop advanced and stands were developing normally.          
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light.    Average local spot prices 
were higher.  No forward contracting or domestic mill activity was reported.   Foreign mill 
inquiries were light.   
     
Mid-week temperatures in the 50s and 60s re-bounded to the mid-80s late week.  Around one-quarter 
of an inch of moisture was received early in the period.  Hopefully, fields that were damaged by 
weather will recover and thrive under sunny, warm weather. Cotton can use the heat units.  
Producers were in the wait and see mode.     
 
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 Far West returned to warmer weather conditions late in the period.  The crop can use the heat 
units, as progress has been slowed by unseasonably cool and wet conditions early in the period.    
     .
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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