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. 99 No. 3 April 13, 2018 Inside this Issue Market Overview Price Support Spot Quotations ICE Futures A Index Southeastern Textile Mill Report South Central Southwestern Western Supply & Demand Cotton & Outlook Average quotations were 12 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 , uniformity ) in the seven designated markets averaged cents per pound for the week ending Thursday, April 12, The weekly average was up from last week and from cents reported the corresponding period a year ago. Daily average quotations ranged from a low of cents Friday, April to a high of 80.0 cents Wednesday, April 11. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 12 totaled 39,459 bales. This compares to 34,740 bales reported last week and 9,39 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,771,81 bales compared to 1,535,773 bales the corresponding week a year ago. The ICE May settlement prices ended the week at 83.9 cents, compared to cents last week. 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 moderate. Demand was moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. A cold front accompanied by widespread showers brought around one-half of an inch to one inch of moisture to areas throughout Alabama, the Florida Panhandle, and portions of south Georgia over the weekend. Daytime high temperatures dipped into the low 0s early in the period, but seasonably warmer temperatures in the upper 70s were observed later in the week. Fieldwork was limited due to the wet and cool conditions; burndown and fertilizer applications continued in areas where ideal weather allowed. Producers were carefully monitoring soil temperatures following the lower-than-normal temperatures observed in March. Planting had begun on a limited basis in the southernmost locales and should expand in the near future as rising daytime temperatures warm soils. In areas of south Georgia, pressure from thrips was building on other crops and producers are monitoring populations ahead of cotton planting. Sunny to mostly cloudy conditions prevailed over the Carolinas and Virginia. Daytime highs prevailed in the low 50s to mid-0s during most of the period, but warmed into the upper 70s late week. Day-to-day scattered showers brought around one-half of an inch to one inch of precipitation to the eastern Carolinas and Virginia. Fieldwork was hindered by wet weather in some areas of North Carolina, but continued where soils were firm enough to support equipment. Windy conditions delayed the application of burndowns and fertilizer in areas of South Carolina. Textile Mill Domestic mill buyers inquired for a moderate volume of 2018-crop cotton, color 41, leaf 4, and staple 34 and longer for December through March 2019 delivery. Reports indicated most mills had covered their immediate-to-nearby raw cotton needs. No sales were reported. Yarn demand was moderate. Most mills operated five to seven days. Load out dates at most warehouses were reported at 8 to 10 weeks. Demand through export channels was moderate and had tapered slightly. Agents for mills in Korea, Thailand, and Vietnam inquired for a moderate volume of color 31, leaf 3, and staple 3 for nearby shipment. Agents throughout the Far East also inquired for any discounted styles of cotton. 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Seasonably erratic climatic conditions were observed during the week. Variable temperatures and windy conditions prevailed. Skies were mostly cloudy, with daytime highs in the 40s and 70s. A storm front early week brought severe weather to parts of the Memphis territory and unseasonably cold overnight temperatures in the low 30s. Frost was reported in some northern areas. A high wind advisory was issued for the Memphis territory late week. No damage was reported to structures or equipment. Less than one inch of rain was reported in northern areas, but the Memphis territory remained under a river flood watch due to heavy rains in the Midwest. Producers reported that recent rainfall and cold temperatures delayed field work, including burndown and fertilizer applications. Planting is still expected to get underway in two to three weeks, perhaps sooner in southern Arkansas. South Delta Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. Typical springtime weather were observed during the period. Daytime temperatures were in the upper 0s to the 80s. Overnight lows were in the 30s and 0s. Approximately 3 inches of rain was reported in most areas; rain was also in the short-term forecast. Outdoor activities were delayed by recent rainfall and cold temperatures, except in a few areas. Soil temperatures were below the optimal range for good germination. Producers were carefully monitoring commodity prices of competing crops and weather conditions; planting was expected to begin soon, once fields dried sufficiently to support equipment and soil temperatures improved. Trading North Delta South Delta 3

4 Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX East Texas Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. Producer interest in forward contracting increased as ICE December futures trended higher in the period. No domestic mill activity was reported. Trading of CCC-loan equities was moderate. Foreign inquiries were moderate. Droughty conditions continued across central and south Texas. A good general rainfall is needed. Planting advanced, with cotton up to stand. Scattered showers were received in the Rio Grande Valley (RGV). Dryland acreage struggled in the RGV, with some skimpy stands. Irrigated acreage made good progress. Most of the crop reached pinhead square stage. Approximately 200,000 acres was planted in the RGV. The Coastal Bend has completed planting, although; there was some replanting in the week. In the Upper Coastal Bend, planting made good progress with approximately 75 percent planted. Cool weather caused some delays, but warmer temperatures this week had producers back on track. Sources reported more cotton was planted in the Upper Coast compared to last year, with some producers switching from corn. Planting was expected to wrap up in 7 to 10 days. The Abilene Classing Office remained on a two-shift operation as ginning continued in Texas, Oklahoma, and Kansas. West Texas Spot cotton trading was slow. Supplies and producer offerings were light. Demand was steady. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. A good general rainfall is desperately needed for all of west Texas. Drought conditions remain a concern for the region. Severe-to-extreme drought conditions exist. The threat of fire danger escalated as high winds and low humidity reign. Field activity was brisk, but limited due to dry conditions. Pre-plant irrigations and herbicide applications were applied to irrigated fields. Dryland preparations included shaping planting beds. Cotton grading continued in the Lubbock Classing Office. Trading East Texas In Oklahoma, a light volume of color 11 and 21, leaf 2 and better, mostly staple 38, mike averaging 38.1, strength averaging 30.1, and uniformity 81.5 sold for around cents per pound, FOB car/truck (compression charges not paid). A heavy volume of mostly color 21 and better, leaf 2 and better, staple 3-38, mike 35-44, strength 27-33, and uniformity sold for to cents, same terms as above. Mixed lots containing of mostly color 11 and 21, leaf 2, staple 34 and 35, mike averaging 44.1, strength averaging 27., and uniformity averaging 80.9 sold for 7.50 to cents, same terms as above. A mixed lot of a moderate volume of mostly color 31 and better, leaf 4 and better, staple 35-37, mike averaging 42.5, strength averaging 29.1, and uniformity averaging 81.8 was sold for around cents, same terms as above. A moderate volume of CCC-loan equities traded for to cents. West Texas A light volume of color 11 and 21, leaf 1 and 2, staple mostly 3, mike 33-40, strength averaging 31.4, and uniformity sold for around cents per pound, FOB car/truck (compression charges not paid). A moderate volume of color 22 and better, leaf 2 and better, staple 3 and 37, mike 3-43, strength 2-30, and uniformity sold for around cents, same terms as above. A light volume of mostly color 21 and 22, leaf 2 and 3, staple 3 and longer, mike averaging 33.5, strength averaging 30.4, uniformity averaging 81.0, and 50 percent bark sold for around cents, same terms as above. 4

5 Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX Photos Courtesy of: Ben Robles, Corpus Christi Classing Office Photos Courtesy of: Dwight Jackson, National Cotton Council 2017 Crop Quality Quality Summary 2017-Crop Region Southeast South Central Southwest Far West Bales 4,437,254 4,220,422 10,105, ,773 United States Upland United States Pima 19,488,150 7,95 Color Grade Leaf Grade Trash Mike Staple Strength Uniformity Number of Gins United States Quality Summary 2017-Crop For complete Quality reports click here. 5

6 Western Markets Regional Summary Maria Townsend 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. Temperatures were mostly in the mid-to-high 90s in Arizona for most of the period. Late week, temperatures dropped into the 80s as strong winds entered the region. The crop made good progress in Yuma. Planting advanced in central Arizona and in the Safford Valley, but strong winds delayed planting late week. Ginning was completed. Fieldwork was active in New Mexico and El Paso, TX, while conditions were good. Strong winds entered the region late in the period. Pre-plant irrigation activities continued. No moisture was recorded in the DSW in the period. Red flag warnings were in effect for central Arizona, southwestern New Mexico, and El Paso, TX due to gusty winds and low humidity. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Unpredictable spring weather continued. Temperatures were mostly in the 70s, but spiked into the high 80s mid-week. Official sources reported one-tenth to one-third of an inch of rainfall was received in the SJV early in the period. Local sources reported showers were hit and miss. A cold front entered the region late in the period producing mostly windy conditions, with little moisture for the SJV. Planting continued with few delays. American Pima (AP) Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Temperatures were in the 70s to 90s in the Far West. The San Joaquin Valley (SJV) of California received one-quarter to one-third of an inch of moisture early in the period. No moisture was received in the Desert Southwest (DSW). A cold front brought strong winds into the region late in the period. Windy conditions slowed planting in the DSW and SJV. Initial planting began in New Mexico and El Paso, TX as weather conditions permitted. Trading Desert Southwest San Joaquin Valley American Pima

7 Supply & Demand The following information was excerpted from the World Agricultural Supply and Demand Estimates, released on April 10, 2018 The 2017/18 U.S. cotton supply and demand forecasts show higher exports and lower ending stocks relative to last month. Production and domestic mill use are unchanged. The export forecast is raised 200,000 bales, to 15.0 million, based on the pace of recent sales and shipments. Ending stocks are now forecast at 5.3 million bales, equivalent to 29 percent of total disappearance. The marketing year price received by producers is projected to average 8 cents per pound, a reduction of 1 cent from last month. Lower global beginning stocks this month result in lower projected 2017/18 ending stocks despite higher world production and lower consumption. World beginning stocks are 900,000 bales lower this month, largely attributable to historical revisions for Brazil and Australia. World production is about 250,000 bales higher as a larger Brazilian crop more than offsets a decline for Sudan. Consumption is about 400,000 bales lower as lower consumption in India, Indonesia, and some smaller countries more than offsets Vietnam s increase. Ending stocks for 2017/18 are nearly 00,000 bales lower in total this month as reductions for Brazil, Sudan, the United States, and Australia more than offset an increase for Pakistan. For complete Supply & Demand report click here. 7

8 Cotton & Wool The following information was excerpted from the Cotton & Wool Outlook report, released on April 12, 2018 U.S. cotton area is projected to increase for the third consecutive season in Based on the National Agricultural Statistics Service s (NASS) Prospective Plantings report that surveyed farmers in early March, producers intended to plant nearly 13.5 million acres to cotton in The initial projection is 7 percent (857,000 acres) above 2017 s plantings and the highest since 2011 s 14.7 million acres. Upland acreage is forecast at 13.2 million acres in 2018, while extra-long staple (ELS) area is estimated at 22,000 acres; for area projections by State and region, see table 10. These estimates will be updated at the end of June in NASS s Acreage report. Cotton planting is underway in two States, according to the NASS Crop Progress report; as of April 9, 7 percent of the expected U.S. acreage had been planted, which was slightly above last year and the average. For complete Cotton & Wool report click here. 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 Mar Mar Mar Mar 30 Apr Apr Apr 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 Through April 0, 2017 Through April 05, 2018 Week Mkt. Year Week - 4,122, ,400 8,759, ,00-12,882,300 - New sales 328, ,00 - Buy-backs and cancellations 21, ,300 - Net sales Sales next marketing year Marketing Years 307, , ,200 2,030,200 28, Mkt. Year 15,052,400 Net sales of 179,400 running bales for 2017/2018 were down 51 percent from the previous week and 4 percent from the prior 4-week average. Increases were reported for Vietnam (120,900 RB, including 1,00 RB switched from South Korea), China (89,800 RB, including decreases of 1,000 RB), Bangladesh (24,300 RB), Turkey (15,200 RB, including decreases of 900 RB), and Indonesia (11,700 RB, including 300 RB switched from Japan). Reductions were reported for Pakistan (115,00 RB). For 2018/2019, net sales of 28,700 RB were primarily for Egypt (8,800 RB), Thailand (7,000 RB), and Japan (4,200 RB). Exports of 499,00 RB were up 10 percent from the previous week and 1 percent from the prior 4-week average. The primary destinations were China (90,000 RB), Pakistan (79,500 RB), Vietnam (74,700 RB), Turkey (2,900 RB), and Indonesia (49,00 RB). Net sales of Pima totaling 900 RB for 2017/2018 were down 91 percent from the previous week and 8 percent from the prior 4-week average. Increases were primarily reported for India (900 RB) and Bangladesh (400 RB). Reductions were reported for Egypt (900 RB) and China (300 RB). For 2018/2019, net sales of 200 RB reported for Egypt (900 RB) were partially offset by reductions for India (700 RB). Exports of 12,500 RB were down 5 percent from the previous week and 44 percent from the prior 4-week average. The primary destinations were India (4,400 RB), China (4,400 RB), and Peru (2,000 RB). Optional Origin Sales: For 2017/2018, the current optional origin outstanding balance is 15,800 RB, all Indonesia.,583,400 8,49,000 Exports for Own Account: New exports for own account totaling 1,300 RB were reported to Indonesia. Exports to Indonesia (3,000 RB) were applied to new or outstanding sales. The current outstanding balance of 15,400 RB is for Vietnam (7,100 RB), Indonesia (4,000 RB), China (3,800 RB), and Bangladesh (500 RB). - 2,851,00 Source: Export Sales Reporting Division, Foreign Agricultural Service, USDA. NOTE: Data may not add due to rounding. April 12, 2018 USDA ANNOUNCES SPECIAL IMPORT QUOTA #25 FOR UPLAND COTTON April 12, 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 April 19, 2018, allowing importation of 13,170,9 kilograms (0,492 bales) of upland cotton. Quota number 25 will be established as of April 12, 2018, and will apply to upland cotton purchased not later than July 17, 2018, and entered into the U.S. not later than October 15, The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2017 through February 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 29, Galveston, TX 13, Greenville, SC Houston, TX Memphis, TN 24, Total 7, 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 Base Base & above & above April 12,

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 December 22, / Pima spot quotations for color-leaf-staple combinations not quoted will be included as sales of those qualities which are reported. Range & Above Level Prep Other (Grams per Tex) Range Mike Diff. 2 & Below Strength & Above & Below Diff Extraneous Matter Diff. April 12,