Weekly Cotton Market Review

Transcription

1 Mp_cn812 Weekly Cotton Market Review Cotton and Tobacco Program Cotton Market News Division 3275 Appling Road Memphis, TN Vol. 100 No. 1 August 3, 2018 Inside this Issue Market Overview Price Support Average quotations were 134 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 35-3 and 43-49, strength , and uniformity ) in the seven designated markets averaged cents per pound for the week ending Thursday, August 2, The weekly average was up from last week and up from 8.08 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 8.49 cents Tuesday, July 31 to a low of cents Wednesday, August 1. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 2 totaled 1,248 bales. This compares to 522 bales reported last week and 2,088 spot transactions reported the corresponding week a year ago. Total spot transactions for the marketing year were 2,059,928 bales compared to 1,5,571 bales at the end of the marketing year. The ICE October settlement prices ended the week at cents, compared to cents last week. Spot Quotations ICE Futures A Index Southeastern Textile Mill Report South Central Southwestern Western Forward Contracting Pima Quotations Cotton Market Reports Subscribe to this report Subscribe to all Cotton Market reports Sources: USDA, AMS, Cotton and Tobacco Program, 1/ Cotlook

2 Southeastern Markets Regional Summary Danny Pino Macon, GA Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Mostly partly cloudy to overcast conditions were observed across Alabama, the Florida Panhandle and Georgia during the period. Daytime high temperatures were in mid-80s throughout the week. Spotty shower activity was observed most of the week, but strong thunder storms entered the region mid-week and dumped heavy moisture on areas from the Gulf to the Atlantic coastal regions in a short period of time. Precipitation totals measured in excess of 4 inches in areas of the Florida panhandle with lesser accumulations of 1 to 2 inches received throughout much of Alabama and portions of north and south Georgia. The crop benefitted from the widespread moisture, but some fields were damaged from hail in Georgia. Crop progress varied; fields that were planted on time were ending their 4th week of bloom, but the latest planted fields were just squaring. Fieldwork was delayed due to the wet weather, but producers applied growth regulators and insecticides as conditions allowed. Local experts reported that target spot disease had appeared in some fields in south Georgia and aerial fungicide applications were underway. Whiteflies were also present, but populations remained low. Pressure from spider mites remained in areas of southeast Alabama and the Florida Panhandle; producers welcomed the wet weather which should beat them back. Similar weather was observed across the Carolinas and Virginia as mostly cloudy conditions prevailed throughout the week with daytime high temperatures in the mid to upper 80s. Intermittent shower activity brought moisture to areas throughout the upper southeastern region during the period. Weekly accumulated rainfall totals measured from one-half of an inch to 2 inches, and some localized areas received in excess of 4 inches. Fieldwork was delayed as the wet conditions interfered with herbicide, insecticide and plant growth regulator applications. Producers continued fieldwork as breaks in the weather allowed. Plant bugs and stink bugs were present at treatable levels. Pressure from bollworms was sporadic. Squaring neared completion throughout the region. According to the National Agricultural Statistics Service s Crop Progress report released July 30, boll-setting had reached 72 percent in Alabama, 5 in Georgia, 2 in North Carolina, and 45 percent in South Carolina and Virginia. Textile Mill Buyers for domestic mills purchased a moderate volume of color 41, leaf 4 and staple 34 for November through March 2019 delivery. No additional sales were reported. Demand of open-end and ring-spun yarn was moderate. Most mills operated five to seven days. Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted styles of cotton. No sales were reported. Trading 2

3 South Central Markets Regional Summary Jeff Carnahan Memphis, TN North Delta Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Fair and mild weather conditions allowed the crop to make good progress. Daytime high temperatures were in the mid-90s. Cool overnight lows were in the 70s. Producers were irrigating to maintain adequate soil moisture levels to rapidly maturing cotton plants. Pop-up thunderstorms brought widely-scattered showers; however, less than 1 inch of precipitation was reported in most areas. Producers were still hoping for a soaking rain from 1 to 2 inches to help maximize yields. Local experts have reported that crop development continues to be about two weeks ahead of last year s pace in Tennessee and perhaps three weeks in Missouri. Boll setting was nearly complete throughout the region. Boll retention and fruit development have been good. Many fields reached cut-out and crop protection measures have ended; a few late-planted fields were treated as necessary due to pressure from plant bugs, bollworms moths, and spider mites. Early-planted and dryland fields were blooming out the top. South Delta Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Favorable weather conditions allowed the crop to make good progress during the week. Daytime high temperatures were in the mid-90s. Overnight lows were in the low 70s. Producers were irrigating to maintain adequate soil moisture levels on late-planted fields. The hot weather and adequate moisture have required multiple applications of plant growth regulators to control vegetative growth. Insect pressure from plant bugs and bollworm moths was heavy in some areas. Fields were treated as necessary; pop-up thundershowers have hindered timely applications in some places and/or have required additional applications as a result of the chemicals being washed-off the plants. Boll setting was nearly complete throughout the region. Local experts indicated that boll retention and fruit development has been good. The crop condition at this point in the season is rated mostly fair-to-good. Many fields were blooming out the top. Trading North Delta South Delta 3

4 Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX East Texas Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Ginning expanded in the Coastal Bend and in the Rio Grande Valley (RGV). The Upper Coastal gins were expected to commence pressing operations by mid-august. Harvesting rapidly advanced in the Coastal Bend with some producers more than 50 percent done. Local reports indicated that, with good harvesting conditions, fields were generally ready to harvest 5 days after defoliants were applied. A storm brought around 1 inch of rainfall on July 31, which briefly slowed field activities. Fields that had been late-planted or replanted were still green, and bolls were still maturing ahead of harvesting. Some dryland fields were shredded in the RGV because it was determined that there was not enough potential yield, or lint pounds per acre, to harvest. Most irrigated fields were still finishing, and had not yet been harvested. Stands in the northern Blackland Prairies struggled to advance and needed rainfall. Defoliants were applied to some fields in the southern Blackland Prairies. Kansas experts reported that the crop is generally two weeks ahead of normal and could result in a September harvest. Rainfall and milder temperatures were received that advanced stands and increased the boll load. In Oklahoma, recent rainfall helped supplement irrigation and plants displayed a good fruit set. Pockets of dryland acres progressed after receiving beneficial rainfall. Estimates indicated that about 25 percent of the dryland acres remained in Oklahoma. West Texas Spot cotton trading was slow. Supplies and producer offerings were light. Demand was very light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Intermittent rainfall was received, but more precipitation would be beneficial to help supplement water on marginally irrigated fields to help avert boll shedding. Some wells are drying and pumping air as the crop nears peak water demand. Groundwater is limited in most areas, and droughty conditions lingered. Plants were at or near peak bloom. Daytime temperatures were generally in the upper 80s to mid-90s. Weeds have not been much of an issue due to the lack of rainfall, according to local Texas Agrilife experts. However, treatments have been applied to control plant pest populations. Some of the notable insects making appearances in cotton fields were aphids, Conchuela stink bugs, bollworms, beet armyworms, yellow striped armyworms, and garden webworms. Ladybugs and other beneficial insects were reported in some fields that helped eliminate the need to apply treatments. Trading East Texas In Kansas, a light volume of mostly color 21 and 31, leaf 4 and better, staple 35 and 3, mike 39-41, strength 27-30, uniformity 79-82, and 25 percent extraneous matter sold for around cents per pound, FOB car/truck (compression charges not paid). In Oklahoma, a mixed lot containing a light volume of mostly color 44 and better, leaf 3 and 4, staple 34 and longer, mike 33-37, strength 24-28, uniformity 77-80, and 100 percent extraneous matter sold for around 0.00 cents, same terms as above. Mixed lots containing a light volume of color 43 and better, leaf and better, staple 33 and longer, mike 38-44, strength 25-29, uniformity 78-81, and 100 percent extraneous matter sold for to cents, same terms as above. A light volume of CCC-loan equities traded for cents. West Texas 4

5 Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX All photos courtesy of: Danielle Sekula, Texas A&M Agrilife 5

6 Maria Townsend Western Markets Regional Summary Visalia, CA 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. Daytime high temperatures were in the mid-100s to the high 110s. Monsoon activity mid-week brought strong winds and rainfall moisture to central Arizona. The crop quickly approached cut-out stage in Yuma. Insect pressure was light. Recent rainfall gave a retreat from excessive heat in the higher elevations of southeastern Arizona. Some squares were dropped to moderate the boll load. Weed pressure was light, but some resistant pigweed was noted, according to industry experts. Afternoon thunderstorms brought three-quarters of an inch of moisture to Artesia, New Mexico mid-week. Abnormally dry-to-severe drought conditions persisted in cotton-growing areas of New Mexico, according to the U.S. Drought Monitor. Local sources reported the crop made good progress. Producers irrigated the crop. Insect pressure was light and easily controlled. 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. Merchants reported no inquiries from China. Some previous sales to China were cancelled; however, shippers substituted US upland with Australian, Brazilian, and Indian cotton. Daytime high temperatures were in the mid-100s. August 2 marked 28 consecutive days of over 100 degree temperatures for the Valley. That s a new record. Heat advisories were posted throughout the SJV. Hazy conditions continued as smoke drifted into the Valley from a couple of wildfires. The crop was in good condition and made good progress. Producers irrigated the crop. Little to no insect pressure was reported. American Pima (AP) Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Daytime temperatures in the 100s to high 110s gripped the far west region. Air quality remained a concern for the San Joaquin Valley (SJV) of California as smoke and ash continue to drift in from nearby wildfires. The far west crop continued to make good progress under hot, dry conditions. Producers irrigated and applied plant-growth regulators to the crop. The Yuma, Arizona crop approached cut-out stage. Blooming advanced in central Arizona and Safford. Some boll shed was reported as a few areas were under Level 2 heat stress. Peak bloom was reached in the SJV. Boll setting was good. Insect pressure was light. Trading Desert Southwest San Joaquin Valley American Pima

7 Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX All photos courtesy of: Maria Townsend, Far West Cotton Market Reporter 7

8 Forward Contracting Upland cotton growers in the United States had booked about 8 percent of their expected acreage by the end of July this season. Contracting has been most active in the Southeastern states where about 18 percent of the crop was under contract by the end of July compared to 13 percent a year earlier. South Central states' growers had forward contracted about 17 percent, compared with 10 percent in Western states growers had contracted about 4 percent of the crop, which was the same as the previous year. Growers in the Southwestern states had 3 percent contracted, lower than the percent the previous year. These estimates were based on the National Agricultural Statistics Board's June Planted Acreage report and information collected by the Cotton and Tobacco Program s Market News Division. Forward contracting of Upland cotton by growers, as of August 1, crops of and planted acreage, 2018 crop 1/ States Planted Acreage / Pct. Pct. Pct. Pct. Pct. Pct. Pct. Pct. Pct. Pct. 1,000 acres Alabama Florida * Georgia ,450 North Carolina South Carolina Virginia Southeastern States ,840 Arkansas Louisiana Mississippi Missouri * Tennessee South Central States ,915 Oklahoma 3/ Texas * 7 3 7,400 Southwestern States * 3 8,240 Arizona * California - * New Mexico Western States * United States ,275 1/ Contracting estimates do not include cotton consigned to marketing organizations but do include cotton contracted with marketing organization 2/ June 2018, Agricultural Statistics Board, NASS, USDA. 3/ Includes Kansas. * Less than 0.5 percent. 8

9 World market prices for upland cotton, in cents per pound, in effect from 12:01 a.m., EDT, Friday through midnight, EDT, Thursday June 29 July July July July 27 July Aug 02 Aug Adjusted world price 1/ Course count adjustment Loan Deficiency Payment (LDP) Fine count adjustment Fine count adjustment / Color 41, leaf 4, staple 34, mike 35-3 & 43-49, strength readings of grams per tex, length uniformity of percent. Source: Farm Service Agency, USDA. Description Outstanding sales Exports Total export commitments Marketing Years Week Mkt. Year Week - 851, ,300 13,720, ,100-14,572,800 - New sales 2,200-23,200 - Buy-backs and cancellations 81,900-3,500 - Net sales Sales next marketing year (55,700) - 19,00 12,500 5,121,800 21, Through July 27, 2017 Through July 2, 2018 Mkt. Year 1,782,900 14,557,800 1,340,700 -,540,800 Net sales of 19,00 running bales for 2017/2018 were up noticeably from the previous week, but down 49 percent from the prior 4-week average. Increases reported for China (,500 RB), South Korea (5,000 RB), Taiwan (3,400 RB), Pakistan (2,300 RB, including decreases of 100 RB), and India (1,300 RB, including decreases of 00 RB). For 2018/2019, net sales of 21,200 RB reported for Vietnam (128,500 RB), Pakistan (25,300 RB), South Korea (23,800 RB), Colombia (22,700 RB), and Mexico (1,700 RB), were partially offset by reductions for India (1,00 RB) and China (1,300 RB). Exports of 259,100 RB were down 12 percent from the previous week and 13 percent from the prior 4-week average. The primary destinations were Vietnam (59,500 RB), Indonesia (42,200 RB), Turkey (38,500 RB), China (28,100 RB), and Thailand (15,400 RB). Net sales of Pima totaling 2,00 RB for 2017/2018 were down 5 percent from the previous week, but up 9 percent the prior 4-week average. Increases were reported for Turkey (1,300 RB) and Pakistan (1,000 RB). Reductions were reported for South Korea (300 RB) and Honduras (200 RB). For 2018/2019, net sales of 900 RB were reported for Pakistan (400 RB), India (200 RB), and Italy (200 RB). Exports of,200 RB were down percent from the previous week and 59 percent from the prior 4-week average. The primary destinations were India (2,100 RB), China (2,000 RB), Vietnam (1,300 RB). Optional Origin Sales: For 2017/2018, options were exercised to export 100 RB to Indonesia from the United States. The current optional origin outstanding balance is 4,400 RB, all Indonesia. Exports for Own Account: The current exports for own account total of 13,000 RB is for Vietnam (,300 RB), China (,200 RB), and Bangladesh (500 RB). Source: Export Sales Reporting Division, Foreign Agricultural Service, USDA. NOTE: Data may not add due to rounding. August 2, 2018 USDA ANNOUNCES SPECIAL IMPORT QUOTA #15 FOR UPLAND COTTON August 2, 2018 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 August 9, 2018, allowing importation of 13,73,800 kilograms (2,803 bales) of upland cotton. Quota number 15 will be established as of August 9, 2018, and will apply to upland cotton purchased not later than November, 2018, and entered into the U.S. not later than February 4, The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2018 through May 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. 9

10 Number of Bales in Certificated Stocks Delivery Points Stocks as of Awaiting Review Non-Rain Grown Cotton Dallas/FT. Worth, TX 7, Galveston, TX Greenville, SC Houston, TX Memphis, TN 12, Total 20, Spot quotations are in cents per pound for cotton equal to the Official Standards, net weight, in mixed lots, compressed, FOB car/truck. SOUTHEAST NORTH DELTA SOUTH DELTA DESERT SOUTHWEST Staple EAST TEXAS-OKLAHOMA WEST TEXAS SAN JOAQUIN VALLEY Staple MIKE DIFFERENCES - POINTS PER POUND SOUTH- NORTH SOUTH E. TX WEST DESERT SJ EAST DELTA DELTA OK Mike Ranges TEXAS SW VALLEY AVG & Below Base Base & Above STRENGTH DIFFERENCES UNIFORMITY DIFFERENCES SOUTH- NORTH SOUTH E. TX Grams WEST DESERT SJ SOUTH- NORTH SOUTH E. TX Unit WEST DESERT SJ EAST DELTA DELTA OK per tex TEXAS SW VALLEY AVG. EAST DELTA DELTA OK TEXAS SW VALLEY AVG & below Diff Base Base & above & above August 2,

11 American Pima quotations are for cotton equal to the Official Standards, net weight, in mixed lots, UD Free, FOB warehouse. 1/ AMERICAN PIMA SPOT QUOTATIONS Color Leaf Staple The current Pima spot quotations represent prices from local sales, export sales, and offerings last reported on May 30, Range 2 & Below & Above 0 Range 34.9 & Below Mike (Grams per Tex) Diff & Above Strength Diff Extraneous Matter Type - Level Prep - Level Prep - Level 2 Plastic - Level / Pima spot quotations for color-leaf-staple combinations not quoted will be included as sales of those qualities which are reported Diff Other - Level Other - Level Plastic - Level August 2,